Bias, Trust, and Trustworthiness: An Experimental Study of Post Justice System Outcomes

Abstract

The criminal justice system imposes long-term spillover costs for the convicted and acquitted in the form of reduced employment opportunities and high rates of recidivism, possibly a byproduct of poor employment opportunities. This paper examines discriminatory behavior of investors and employers when they are given the opportunity to condition on their trustee’s/worker’s criminal record. Similar to the real world, our experiment shows that employers and investors do exhibit discriminatory behavior toward those with criminal conviction and those with criminal acquittals. However, no basis exists for the statistical discrimination, since reciprocator behavior is found to not depend on criminal record, while true innocence or guilt is found to play a large role in a subject’s reciprocity. While access to true innocence and guiltiness would prove invaluable to investors and employers, this is unobtainable in the real world and equating convictions with true guiltiness is worrisome, given truly innocent subject’s willingness to plead guilty.

Keywords: crime, trust, beliefs, justice

JEL Classification: K40, D90, D91, C91