SAFE Working Paper No. 356

Why do we Discriminate? The Role of Motivated Reasoning

Identifying the cause of discrimination is crucial to design effective

policies and to understand discrimination dynamics. Building on traditional

models, this paper introduces a new explanation for discrimination:

discrimination based on motivated reasoning. By systematically

acquiring and processing information, individuals form motivated beliefs

and consequentially discriminate based on these beliefs. Through

a series of experiments, I show the existence of discrimination based on

motivated reasoning and demonstrate important differences to statistical

discrimination and taste-based discrimination. Finally, I demonstrate

how this form of discrimination can be alleviated by limiting

individuals’ scope to interpret information.