This experiment consists of two phases: 1) the preliminary phase, in which we aim to recruit 150 participants to complete a series of anagram tasks; and 2) the main phase, in which we aim to recruit 44 participants for each of the four treatments to complete a hiring task (i.e., 176 participants in total).
In the preliminary phase, participants will be asked to complete five 2-minute anagram tasks individually and paid by piece-rate performance. This phase is designed to generate actual profiles of candidates to be used in the main phase of the experiment. The benefit of using actual profiles is to introduce real consequences for discriminatory behaviour and therefore capture the actual level of employer discrimination (Hedegaard & Tyran, 2018). To construct a balanced candidates pool for the second phase, 75 participants will be recruited from an ethnic minority group (i.e., East Asians) and the remaining 75 will be recruited from the ethnic majority group (i.e., Whites). Out of the five performances, we drop the lowest and the highest scores to form the final candidate profiles. And we randomly choose 2 scores from the rest of 3 scores remaining as the pre-performance score and interview performance score
In the main phase of the experiment, participants will undertake a manager's role to make hiring decisions, using a set of four pre-screened candidate profiles based on data from the preliminary phase. Each participant will be assigned to one of the following four experimental treatments: Individual-Flexible treatment - without the equal pay policy or hiring competition (Treatment 1), Individual-Fixed treatment - with an equal pay policy (requiring employers to offer the same wage to all chosen candidates) but without hiring competition (Treatment 2), Competition-Flexible treatment - with hiring competition (employers compete with each other over wages for each candidate) but without the equal pay policy (Treatment 3), and Competition-Fixed treatment - with both the equal pay policy and hiring competition (Treatment 4). We will recruit only participants from the ethnic majority group to act as employers/managers. Each set of four candidate profiles includes two minority and two majority candidates, randomly selected from the pool collected in the preliminary phase.
The employer/manager will be provided with the interview performances of all four candidates. They will then decide whether or not to hire each candidate and, if they opt to hire, what wage they are willing to offer. Each candidate will have an undisclosed reservation wage. The employer/manager can successfully hire a candidate if their wage offer is higher than the candidate's reservation wage (Treatments 1 and 2), or if their wage offer is higher than both the candidate's reservation wage and the competing manager's wage offer for the same candidate (Treatments 3 and 4). Depending on the treatment, the potential employer/manager can choose to offer an identical wage (Treatments 2 and 4) or different wages to different candidates. Along with interview performances, the potential employer/manager will also be given information about the candidates’ ages, prolific IDs (not their actual IDs), and ethnicity (reflected through their surnames).