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.