Abstract

This paper discusses social mechanisms of discrimination and reviews existing field experimental designs for their identification. We first explicate two social mechanisms proposed in the literature, animus-driven and statistical discrimination, to explain differential treatment based on ascriptive characteristics. We then present common approaches to study discrimination based on observational data and laboratory experiments, discuss their strengths and weaknesses, and elaborate why unobtrusive field experiments are a promising complement. However, apart from specific methodological challenges, well-established experimental designs fail to identify the mechanisms of discrimination. Consequently, we introduce a rapidly growing strand of research which actively intervenes in market activities varying costs and information for potential perpetrators to identify causal pathways of discrimination. We end with a summary of lessons learned and a discussion of challenges that lie ahead.