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MASTER THESIS

Attractiveness Bias and Potential Impact on


HR Decisions: Statistical Evidence from a
Natural Experiment

Institute for Markets and Strategy


Vienna University of Economics and Business;

Department of Operations Management


GSOM St. Petersburg

Supervised by:

Dr. Redzo Mujcic


Prof. Iya Y. Churakova

Written by:

Marie Uncovska
Master in Strategy, Innovation and Management Control (WU)
Master in Management (GSOM),
Student ID: h1352382 / st066154
May 24, 2018
Abstract

This paper explores the attractiveness bias in the context of HR decisions managers face.
Influencing factors – such as gender, race, age and profession – are isolated and observed
separately. The data used stems from a television show involving participants who face
trade-offs between the personality and attractiveness attributes of potential partners as a
natural experiment to measure discrimination on the basis of physical appearance. Evidence
of strong gender differences in attractiveness bias is found, with women caring significantly
more about physical attributes than men. This finding is robust to a number of other
important characteristics including age, race, occupation, and geographical region. The
potential impact on a number of HR decisions, including staffing, hiring and recompensing
as well as implications for social and organizational behaviour are discussed.

JEL codes: attractiveness bias, organizational decision-making, behavioral biases in HR


management, gender-specific differences in decision-making, natural experiment in
behavioral economics.
Аннотация

В данной работе рассматривается влияние привлекательности при принятии решений


в области управления персоналом. Факторы воздействия – такие как пол, националь-
ность, возраст и профессия – изолированы и исследованы отдельно. Данные собраны
на основе эксперимента в естественных условиях: телевизионного шоу, в котором участ-
никам необходимо выбрать партнера на основании либо физической либо личностной
привлекательности. Таким образом, представляется возможность измерить уровень
дискриминации на основе внешнего вида. В результате исследования выявлены раз-
личия в том, насколько много внимания внешности уделяют мужчины и женщины.
Данные позволяют сделать вывод, что женщины склонны уделять намного больше
внимания внешности, чем мужчины. Выявленная закономерность устойчива к другим
важным характеристикам, таким как возраст, национальность, профессия, и геогра-
фический регион. В работе также обсуждается влияние данных предубеждений на
ряд решений в области управления персоналом, включая кадровое наполнение, набор
новых сотрудников и распределение вознаграждений, а также потенциальное воздей-
ствие на поведение работников на предприятии.

Ключевые слова: склонност к предубеждениям на основе внешности, организацион-


ное принятие решений, предвзятость в управлении человеческими ресурсами,
гендерные различия в процессе принятия решений, естественный эксперимент
в поведенческой экономике.
Short Tabular Overview

Student Marie Uncovska


Master Attractiveness Bias and Potential Impact on HR Decisions:
Thesis Title Statistical Evidence from a Natural Experiment /
Educational Master in Management
Program
Field of Markets and Strategy; Operations Management
Study
Year 2018
Academic Dr. Redzo Mujcic, Prof. Iya. Y. Churakova
Advisor(s)
Goal, tasks Explore the attractiveness bias in the context of HR decisions and
and main observe the effect of influencing factors such as gender, race, age and
results profession. Discuss the potential impact on a number of HR decisions,
including staffing, hiring and recompensing as well as implications for
social and organizational behaviour. Evidence of strong gender
differences in attractiveness bias is found, with women caring
significantly more about physical attributes than men. This finding is
robust to a number of other important characteristics including age, race,
occupation, and geographical region.
Обзор в виде таблицы

Автор Мария Унчовска


Название ВКР Влияние склонности к предубеждениям на основе
внешности в управлении человеческими ресурсами
компании: статистическое исследование путем
естественного эксперимента.
Образовательная Менеджмент
программа
Направление Рынки и стратегия; Управление операциями
подготовки
Год 2018
Научный Чуракова Ийя Юрьевна, Др. Редзо Муйчич
руководитель
Описание цели, В данной работе рассматривается влияние привлекательности
задач и основных при принятии решений в области управления персоналом.
результатов Факторы воздействия – такие как пол, национальность,
возраст и профессия – изолированы и исследованы отдельно.
Данные позволяют сделать вывод, что женщины склонны
уделять намного больше внимания внешности, чем мужчины.
Выявленная закономерность устойчива к другим важным
характеристикам, таким как возраст, национальность,
профессия, и географический регион. В работе также
обсуждается влияние данных предубеждений на ряд решений
в области управления персоналом, включая кадровое
наполнение, набор новых сотрудников и распределение
вознаграждений, а также потенциальное воздействие на
поведение работников на предприятии.
Declaration of Authorship

I hereby declare that I have written this Master Thesis myself, independently and without
the aid of unfair or unauthorized resources. Whenever content has been taken directly
or indirectly from other sources, this has been indicated and the source referenced. This
Master Thesis has not been previously presented as an examination paper in this or any
other form in Russia or abroad. This Master Thesis is identical with the thesis assessed by
the examiner.

Marie Uncovska
St. Petersburg on May 24, 2018.
Contents
List of Figures ii

List of Tables ii
Introduction 1
The Issue of Attractiveness Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Research Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1 Decision-Making and Attractiveness Bias in the Context of Organizational


Behavior 3
1.1 Decision Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Organizational Decision-Making . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.3 Cognitive Fallacies in Organizational Behavior . . . . . . . . . . . . . . . . . 14
1.4 Attractiveness Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.5 Gender-Specific Differences in Bias . . . . . . . . . . . . . . . . . . . . . . . 20
1.6 Preferences in Partner Selection . . . . . . . . . . . . . . . . . . . . . . . . . 22
1.7 Hypotheses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

2 Data and Methodology 25


2.1 The Dating Experiment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.2 Participant Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.3 Empirical Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

3 Results 30
3.1 Preliminary Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.2 Gender Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.3 The Effect of Participant-Partner Similarity on Attractiveness Bias . . . . . 35
4 Discussion 38
4.1 Practical Implications and Recommendations for HR Managers . . . . . . . 38
4.2 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Conclusion 46
Bibliography 47

i
List of Figures

1.1 Scope of organizational decision making . . . . . . . . . . . . . . . . . . . . 10


1.2 General attribution sequence . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.3 Task-related interdependence. . . . . . . . . . . . . . . . . . . . . . . . . . . 20

List of Tables

1.1 Comparison of organizational decision-making models . . . . . . . . . . . . 12

2.1 Sample participant characteristics . . . . . . . . . . . . . . . . . . . . . . . . 27

3.1 Attractiveness discrimination by group . . . . . . . . . . . . . . . . . . . . . 31


3.2 The effect of participant and partner attributes on the probability of attrac-
tiveness discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.3 Gender-specific participant differences . . . . . . . . . . . . . . . . . . . . . 34
3.4 The effect of participant-partner similarity on attractiveness discrimination 36

ii
Introduction

Gender differences in human behaviour and social outcomes have long been studied by
social scientists including anthropologists, sociologists, psychologists, and, most recently,
economists. Economists have found men and women to elicit different preferences in con-
sumption and investment markets, the labour market, as well as the dating and marriage
markets.1 Interest in the latter social interaction follows from the seminal work by Gary S.
Becker (1973) who formalized the marriage decision as one based on assortative matching
of partner attributes such as age, education, wealth, and physical appearance. To take an
example, in the case of positive sorting over physical appearance, a beautiful female is most
likely to form a match with a good looking male, and vice versa.

In this paper, gender differences in the demand for physical appearance, or ‘attractive-
ness’, is studied. This is done by analyzing unique data from a television dating show
involving participants who at first choose a dating partner based on the personality at-
tribute only, and in the second stage are able to reject their ‘personality partner’ after the
attractiveness attribute is revealed. Given the random assignment of partner beauty to
participants (the decision makers), the television show serves as a natural experiment to
examining gender differences in attractiveness discrimination. Based on a simple discrete
choice framework, women are found to discriminate (reject their personality partners) more
than men.

The Issue of Attractiveness Bias


Attractiveness bias denotes the ‘differential treatment of individuals based on their physical
appearance’ (Whitley and Kite 2009).

This paper first and foremost aims to answer the question ‘Which gender discriminates
more based on attractivity?’. It analyzes gender differences in the dating market, where
(similar to labour hiring decisions) a number of studies have found gender differences in
1
For a recent survey on gender differences in preferences, see Croson and Gneezy (2009).

1
Introduction

preferences for physical appearance or beauty. Most existing studies find men to care more
about the beauty of their potential partner than women (Sprecher et al., 1994; Fisman et
al. 2006; Croson and Gneazy, 2009; Hitch, Hortaçsu, and Ariely, 2010). On the other hand,
a handful of recent studies find the opposite with women discriminating more on the basis
of looks than men (Belot et al., 2008). This paper attempts to synthesize these findings
and integrate them into the organizational context.
In a second step, it is examined which other personal characteristics (variables) impact
attractiveness bias and to what extent they do so. Variables analyzed include age, race, and
profession. Hereby, the individual and combined impact of these variables is scrutinized and
evaluated. Finally, the findings are extrapolated on the general organizational and labor
market context.

Research Gap
The present study is motivated by and adds to two main streams of literature. First, the
study of cognitive biases and their effect on organizational behavior; second, the research
on gender-specific differences in behavior.
While many cognitive fallacies have been extensively analyzed and covered in academic
research in relation to their effect on organizational behavior, the attractiveness (or, in some
sources, attractivity) bias has found little coverage in academic literature. Additionally, very
little research has been conducted outside the laboratory setting.
Nonetheless, attractiveness bias can have grave impacts on organizational behavior: from
sub optimal hiring and selection decisions, to questions of cooperation vs. competition
within the organization, remuneration and promotion policies, and team dynamics. Espe-
cially the hiring and selection process is said to have a fundamental effect on the success
of not only the individual in question, but also the hiring organization (Gatewood, Feild,
and Barrick, 2008). If the hiring process itself is however already beset by bias, it will lead
to inferior decisions, high employee turnover and otherwise avoidable costs. That fair and
unbiased remuneration and promotion policies are essential not only to the workings of the
firm, but also for higher aims such as social justice is without question. But also team
dynamics and questions of cooperation vs competition can be negatively affected by bias.
In order to prevent these detrimental effects, managers first need to be aware of the
existence of this mental fallacy. Only then can they take concrete action against them.

2
1 Decision-Making and Attractiveness
Bias in the Context of Organizational
Behavior

The present study relates to three main groups of studies within the economics literature.
First, it contributes to recent works on descriptive behavioral decision theory. Hereby, the
effect different cognitive biases have on organizational decisions is analyzed. Special scrutiny
is placed on decision-making and problem-solving processes.
The second group of studies this paper relates to concerns itself with gender-specific
differences in the decision-making process. The findings build on experiments such as the
Iowa Gambling Task and (Weller, Levin, and Bechara, 2010; van den Bos, Homberg, and de
Visser, 2013) and new insights from the neurochemical field (Cosgrove et al., 2007; Ashareet
al., 2013).
Finally, the third group of academic literature this paper links to is research on preferences
in partner selection (Sprecher et al., 1994; Fisman et al. 2006; Croson and Gneazy, 2009;
Hitch, Hortaçsu, and Ariely, 2010), which finds a general preference for partner homogeneity
as well as a strong male preference for physical attractivity in their partners compared to
the female preference for attributes related to social status.

1.1 Decision Theory


According to the Stanford Encyclopedia, decision theory is ‘concerned with the reasoning
underlying an agent’s choices’. From mundane, everyday decisions such as what to eat
for lunch to life-changing choices such as career selection – decisions are an indispensable
part of human existence. As Albert Camus once famously said, ‘Life is the sum of all your
choices’. Understandably, this makes decision theory a medley of intellectual disciplines.
Philosophers, historians, mathematicians, and, most recently, economists have been seeking
the rationale for human decision making.
Decision theory can be regarded from a normative and a descriptive point of view. The

3
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

former aims to provide a framework about how decisions should be made, while the latter
analyzes the decision-making process itself and seeks to answer how decisions are made
(Hansson, 2005; p. 7f). This paper focuses on the descriptive aspects of decision theory, as
it aims to shed light on one of the underlying biases affecting human choice: attractiveness
bias.
Historically, decision theory is based on three pillars: rationality, uncertainty and, conse-
quently, the utility theory. Instead of leading to a more comprehensive, perfectly rational
decision-making strategy, most recent research has however begun to cast doubt on these
three fundamentals (Buchanan and O’Connell, 2006). Over the years, both contextual
and psychological constraints have been identified by a number of authors, from Simon’s
bounded rationality theory (Simon, 1982) to Tversky’s and Kahneman’s two-system-model
(Tversky and Kahneman, 1981) and Savage’s subjective expected utility theory (Savage,
1951). In the following, these three fundamentals as well as most recent developments in
the field will be discussed more in detail.

Rationality

According to the Oxford dictionary, rationality is defined as ‘behavior that is goal-oriented,


reflective (evaluative), and consistent (across time and different choice situations)’. The as-
sumption of human choice as ‘rational’ dates back to Aristoteles and his view of mankind
as a creature distinguished by a rational principle (‘rational animal’. While widely crit-
icized and debated in philosophy, economists have continued to assume rationality as an
underlying principle to human action until well into the 20th century (Sen, 1997). Some of
the most influential economic models are based on the concept of the ‘homo economicus’ –
namely the idea that ‘humans as consistently rational and narrowly self-interested agents
who usually pursue their subjectively-defined ends optimally’ (Rittenberg and Tregarthen,
2012). Among other influential economic thinkers, Adam Smith, David Ricardo or Vilfredo
Pareto all based their theories on the concept of the ‘homo economicus’.
In 1938, Lionel Robbins proposed the rational choice theory, a framework for modeling
economic behavior (Sen, 2008). The basic premise of the rational choice theory is that social
(or organizational) behavior is made up out of the sum of individual choices, which follow
a clear rationale. Robbins assumes that under complete information, individual agents are
able to assign complete and transitive preferences among different options. Taking into
account the available information, probabilities of events, and potential costs and benefits
in determining these preferences, the agent is then assumed to act consistently in choosing
the self-determined best choice of action.

4
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

There are several problems with this framework: first, irrational choices are explained
only by the agent’s lack of information. However, the existence of perfect information in
real-life situations is doubtful at best. Second, the rational choice theory ignores the agent’s
cognitive limitations: appropriately analyzing all associated information (costs, benefits and
uncertainty) takes up significant resources and is prone to be affected by several biases and
behavioral heuristics. Especially the latter point gave rise to behavioral economics, a field
that aims to account for the behavior of economic actors such as it is, rather than assuming
idealized instrumental rationality.
In response to the limitations of the rational choice model, in 1982 H. A. Simon published
the bounded rationality model. The core of the model is precisely the limitation to
human rationality – be it of cognitive or temporal nature or caused by external context.
In this context, individuals no longer seek to maximize their utility by making the optimal
choice, but rather by obtaining the most satisfactory solution (‘satisficing’ ) – making choices
that are only ‘good enough’.
Empirical studies done by Tversky and Fox (1995), Thaler (1994) and Bowles and Gintis
(2002) further shed doubt on the classical rationality assumption. While Tversky and
Fox demonstrate investor irrationality1 , Thaler focuses on systematic mental biases that
color human judgment. In ‘Quasi Rational Economics’, Thaler explores cognitive biases
caused by mental accounting2 , intertemporal choices3 and the fairness bias4 . Bowles and
Gintis (2002) go a step further away from the ‘homo economicus’ concept towards a more
cooperative, reciprocal model of human behavior, coining the term ‘homo reciprocans’.
Hereby, humans are seen as cooperative agents aiming to improve their environment. In an
experimental one-shot game, Bowles and Gintis find that human decision is often framed by
social mechanisms such as ‘reward’ and ‘punishment’, leading to cooperation even though
there is no reciprocation possible.

1
Tversky and Fox analyze investor behavior in an extensive empirical study and find that investors have a
preference for risk-averse choices in gains and choose risk-seeking behavior in losses. Additionally, there
is an overall indifference for large losses compared to risk-averse behavior for small losses (Tversky and
Fox, 1995)
2
‘Coding, categorizing and assigning values to economical outcomes’, (Thaler, 1994; p. 25f.)
3
Decisions done at one point of time that influence the possibilities available at a future point in time;
mostly concerned with what and how much to do at various points of time; influenced by relative value
assigned to future payoffs (Thaler and Shefrin, 1994)
4
The concept of ‘fairness’ alters behavior: agents do not pursue utility-maximizing strategies (Kahneman,
Knetsch, and Thaler, 1986)

5
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

Risk and Uncertainty

In order to make informed decisions, the associated risk needs to be taken into account.
While risk itself plays a prominent role in today’s research environment, it found its way
into standard business vocabulary only after World War II, when Frank Knight first distin-
guished between risk and uncertainty. The former hereby refers to a situation in which the
probability of an outcome can be calculated; the latter denotes the opposite case, in which
outcome probabilities cannot be mathematically determined (Frank, 2012).
Uncertainty in decisions was, by then, no novelty. Giacomo Cardano mused about prob-
ability puzzles during the Renaissance; Blaise Pascal and Pierre de Fermat pondered over
the likelihood of great riches in a game of dice; Bernoulli laid the groundwork for risk man-
agement by introducing binary probability distribution. In ‘An Essay towards solving a
Problem in the Doctrine of Chances’ (1763), Bayes describes the relationship between the
probability of a hypothesis before and after receiving evidence. Based on the conditional
probability axiom, it enables updating the probabilities of hypotheses when given evidence.
In relation to decision theory, Bayes’ theorem finds wide application: a Bayesian decision-
maker will make use of Bayesian probabilities to compute expected outcomes and update
his or her beliefs.
Risk and uncertainty is a key part of decision making, as it serves to asses the expected
outcomes on any given action. However, humans are notoriously bad at not only assessing
risk, but moreover interpreting probabilities.
On the one hand, an ‘extraordinary ability to compute’ (Arrow, 1982) is being ascribed to
the average decision-maker: the theories modeling decision-making assume the agents to be
able to correctly estimate and calculate the underlying probabilities, which is not necessarily
reflected in reality. On the other hand, even when probabilities are given, decision-makers
are prone to a number of different biases and do not evaluate the risk mathematically. Re-
search by Teigen and Brun (1999) shows that context alone can modify human judgment
of probabilities: people let themselves be distracted by the usage of phrases such as ‘likely’
and ‘unlikely’ to assess the probability of any given event. Bilgin and Brenner (2013) and
Tversky and Kahneman (1981) conclude that humans tend to neglect base rate probabil-
ities and underweight individual predictions5 ; Donohue and Levitt (1998) analyze how we

5
In an experimental study, Bilgin and Brenner asked respondents how likely they would be to bring an
umbrella if the weather forecast suggested 30% probability of rain in Seattle (known for its humid
climate) and Phoenix (known for rather hot and dry climate). The likeliness of a respondent bringing an
umbrella to Seattle was significantly higher than to Phoenix; respondents were adding their perceived
base probability of rain to the probability mentioned in the weather forecast. Tversky and Kahneman
show similar results in a series of studies on heuristics and fallacies in decisions under uncertainty.

6
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

continuously over-value low and under-value high probabilities.


Based on these findings, Tversky and Kahneman (1981) go on to develop the ‘two-system-
model’ of thinking, postulating that some decisions are based on rational, analytical think-
ing, while others are done more or less automatically, marked by heuristics and intuition.
It is especially these findings that reinforce the need for a more comprehensive view on
decision-making and a more profound analysis of underlying biases.

Measuring Utility

In order for decision-makers to be able to assign preferences to different outcomes and make
them comparable, they first must assign values to each and every outcome. As not every
outcome can be valued in monetary terms, ‘utility’ as a measure of preferences over a
certain set of options enables them to do so and thus forms the foundation of a wide branch
of economics. The concept of utility was first mentioned by none other than Adam Smith.
In ’The wealth of nations’ (1776), he differentiated between ‘value in use’ and ‘value in
exchange, with the former referring to the utility of some particular object and the latter
denoting the ‘power of purchasing other goods which the possession of that object conveys’.
Later, Jeremy Bentham used the utility calculus to defend equality; Jevon, Menger, and
Walras developed the relationship between utility and demand and established the concept
of marginal utilities; Pareto created the concept of Pareto efficiency around utility theory
(Stigler, 1950).
The first formal application of utilities to decision theory came only in the middle of
the 20th century, when von Neumann and Morgenstern formulated the expected utility
hypothesis. Initiated by an intellectual puzzle posed by Nicholas Bernoulli in 1713 and
solved by Daniel Bernoulli in 17386 , von Neumann and Morgenstern seek to explain popular
choices that contradict the expected value criterion. Where Bernoulli utility functions (u)
only represent preferences over monetary outcomes, the von Neumann and Morgenstern
theorem (U ) denotes preferences over lotteries of monetary outcomes. In this way, Bernoulli
utility can hardly be distinguished from ordinary utility functions over consumption bundles,

6
The St. Petersburg paradox refers to a theoretical lottery game that leads to a random variable with
infinite expected value, nonetheless seems to have little value to the players. At the core of the problem
is a sequential game of ‘heads or tails’, for which a casino offers to pay 2 dollars for each ‘heads’,
doubling the amount every round. The game ends with the first ‘tails’. The expected value of the game
is EV = ∞, thus meaning that participants should be willing to pay any price asked to participate.
However, this suggestion was encountered with widespread disbelief. The solution proposed by Daniel
Bernoulli includes the introduction of utility functions and the presumption of a decreasing marginal
utility of money. Von Neumann and Morgenstern later expanded on this concept.

7
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

while the expected utility hypothesis enables the examination of the effects of uncertainty
as well as including the attitude towards risk.
Albeit clearly factoring in a wider range of variables, the expected utility hypothesis still
does not provide a complete, comprehensive decision model. First, the model is limited
to assessing choices with an objective and known probability distribution over outcomes.
Going back to Knight’s (1921) distinction between choices under risk and choices under
uncertainty, most real-life situations can be ascribed to the latter, while von Neumann and
Morgenstern’s expected utility hypothesis only is applicable to the former. Additionally,
the theorem does not consider the context of choice such as reference points7 (Rabin, 2013)
or inconsistencies within preferences among the same choice of individuals (Tversky and
Kahneman, 1981)8 .
To address the limitations of the expected utility hypothesis – namely the objectivity
of the probability distribution over choices and the lack of contextualization of options -
several alternative models have been developed. They are usually referred to as subjective
expected utility theories and encompass works by Savage (1954) as well as Kahneman
and Tversky (1979).
Leonard Savage’s representation theorem addresses choices under uncertainty rather
than risk and combines two concepts: first, a personal utility function, second a subjective
probability distribution over different choices (Karni, 2008). This way, individual beliefs re-
lated to the probability distribution over outcomes are included in the theorem. According
to Savage, individual beliefs and thus subjective probability distributions can be deducted
from their preferences and are state-dependent. While certainly a powerful tool, the core
weakness of the theory lies in this deductibility of subjective probability distributions from
preferences, as it models an output variable (preference) to asses an input variable (prob-
ability distribution). Additionally, numerous experiments have shown that individuals do
not behave in a manner consistent with Savage’s decision model, such as the Allais (1953)
or Ellsberg paradox (1961). Adding to this, in 1979 Kahneman and Tversky first published
their paper on prospect theory, which relates to the context the choice is presented in to
asses a subjective probability distribution over multiple options. Kahneman and Tversky
assume that losses and gains are valued differently, which leads to individuals making incon-
sistent choices based on whether they are based on perceived losses or perceived gains. This
7
The ‘history’ or ‘starting point’ of every individual faced with a choice. The expected utility theorem
assumes that holding wealth constant, two identical individuals will show the same risk attitude and
utilities. However, this does not consider loss aversion – if one individual had previously lost a large
sum of money, she will exhibit a more risk-averse attitude than her otherwise identical counterpart.
8
Tversky and Kahneman (1981) demonstrate that the preferences among the same choice vary ‘depending
on how these choices are presented’.

8
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

concept is often referred to as ‘loss-aversion theory’ and denotes the preference for avoiding
losses to acquiring equivalent gains. In the context of behavioral decision making, this leads
to a so-called ‘fourfold pattern of risk attitudes: risk-averse behavior when gains have mod-
erate probabilities or losses have small probabilities; risk-seeking behavior when losses have
moderate probabilities or gains have small probabilities’ (Kahneman and Tversky, 2013).
Kahneman and Tversky demonstrate this in practice, proving that when presented with
two equal choices, one shown in terms of potential losses and the other formulated in terms
of potential gains, the latter option will be chosen. However, despite presenting a compre-
hensive alternative to the expected utility hypothesis, the difficulties inherent in applying
prospect theory in economics have made an evaluation of the concept difficult (Barberis,
2013).
Aside from the critique of utility-based decision models, the concept of utility itself has
been widely criticized. Joan Robinson denoted utility as a ‘circular, non-testable concept’
(Robinson, 1964); Albert further questioned the empirical demonstrability of utility (Albert,
1998); numerous authors further postulate that ‘beliefs and desires are vague’ and thus
cannot be clearly assigned as utilities (Stigler, 1950).

Summary

Historically, economists paid little tribute to behavioral and psychological factors in decision-
making. Discrepancies and irregularities in observable events to the prevalent mathematical
models were ascribed to the agents’ incomplete information. The critical examination of
the three fundaments of decision theory - namely rationality, uncertainty and risk and
utility theory – over the past 50 years has given rise to a new field in economics: behav-
ioral decision theory. Behavioral decision research denotes an approach to judgment and
decision-making that centers around subjective expected utility and departs from normative
theories such as the classical utility theory or Bayes’ theorem. It has developed considerably
since the 1950s, and now provides many important insights into managerial behavior. A
core component of behavioral decision theory is the research into different cognitive fallacies
that color human judgment, of which the following section provides a brief overview.

9
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

1.2 Organizational Decision-Making


Organizational decision making, which is at the core of the present study, encompasses both
individual and collective decisions.
While the scope of the individual decision varies with management level (see Figure 1.1),
the sum of all individual choices adds up to determine a company’s success or failure. In
order to avoid detrimental choice behavior in organizations, managers need to establish un-
biased decision-making frameworks and take direct action against heuristics in judgment. In
academic literature, different approaches to informed decision-making have been identified
(see e.g. Fayol, 1960; Collins and Guetzkow, 1964; Delbecq and Van de Ven, 1971; Simon,
1982). Table 1.19 summarizes the key attributes of six of these models.

Figure 1.1: Scope of organizational decision making. Reproduced from: Langton, N., Rob-
bins, S. P., and Judge, T. A. (2013). Fundamentals of organizational behaviour.
Chapter 6 Pearson Education Canada.

The logic used to systemize these decision-making models distinguishes between so-called
closed and open systems, the key difference between them being that the former assumes all
variables involved to be either known or knowable, while the latter assumes the variables
to be unknown in their specifics as well as number. This makes closed system models deter-

9
Extracted from: Nutt, P. C. (1976). Models for decision making in organizations and some contextual
variables which stipulate optimal use. Academy of management Review, 1(2), 84-98

10
ministic and proactive in their nature, while open system models are adaptive and reactive
(Nutt, 1976)10 . According to this classification, closed system models are more appropriate
for first level managers, as most data is known (or knowable), goals and responsibilities
are clearly divided, and tasks are characterized by repetitiveness. Compared to this, open
system models are more applicable in decisions with increasing uncertainty and complexity,
such as top-level managers face. This is especially true in situations with unknown (or
unknowable) goals, a strong interaction between the goals and the environment as well as
a high number of individuals involved.

10
Following this, models [1] and [2] (bureaucratic model and normative decision theory) can be characterized
as close system logic, while models [3] and [4] (behavioral and group decision model) belong to interme-
diate system logic, with models [5] and [6] (conflict equilibrium and open system model) qualifying as
open system logic.

11
Table 1.1: Organizational decision-making models
Model Decision Criteria Key Ingredients Key Assumptions
Bureaucratic Maximum effi- (1) Define decision maker’s jurisdiction Goals known
Model [1] ciency (2) Appoint experts to office and invest Master plan to judge action is
(Fayol, 1960) power in office holder a given
(3) Rules, procedures, and precedents de- Tasks repetitive or predictable
pict decision premises Environment does not influ-
(4) Refer decisions "up" hierarchy ence choices
(5) Rewards based on adherence to master Resources adequate
plan
Normative De- Maximum sub- (1) States of nature Goals known
cision Theory jective expected (2) Alternatives Information obtainable
[2] (Savage, utility
1951) (3) Probability distribution for different Resources available
12

states Prediction feasible


(4) Utilities for each alternative Criteria for judgment are
(5) Criteria to determine utilities known
Behavioral De- Satisficing (1) Identifying acceptable states of nature Goals known
cision Theory and generating alternatives Information on alternatives
[3] (2) Sequential generation of information not fully available, justifying
(Simon, 1982) on alternatives search for them
(3) Processes: searching, learning, choos- Consequences of alternatives
ing cannot be fully assessed
(4) Satisficing replaces optimizing in deci- Resources interact with deci-
sion processes sion processes
Continued on next page
Table 1.1 – Continued from previous page
Model Decision Criteria Key Ingredients Key Assumptions
Group Deci- Satisfice objectives (1) Forming groups Goals known and consistent
sion Making set by group (2) ’Coalescing’ - setting boundaries and with organizational goals
[4] (Collins rules Synthesis of preferences possi-
and Guet- ble and feasible
zkow, 1964) (3) Processes
(4) Control for initially set goals Implementation likelihood in-
creased by participation
Resources and information
available
Conflict Equi- Resolution of con- (1) Decision alternatives cause conflict (in- Goals known
librium [5] flict by consensus dividual and group) Organization seeks to mini-
(March and (2) Processes include bargaining, persuad- mize conflict
Simon, 1976) ing and politicking Time pressure causes prelim-
13

(3) Compromise as viable outcome inary choice, proceeded by


(4) Outside, contextual factors (e.g. per- reevaluation and search for
ceptions, rewards, dependencies, opportu- new alternatives
nity cost) strongly influence choice
Open Sys- Survival (organiza- (1) Problem causes stimulus Goals unknown and unknow-
tem [6] (Gore, tion), acceptability (2) Response is adaptive and incremental able
1964) (client) process Informal norms greater pres-
(3) Constraint on decision maker set by sure than formal norms
client Strong interaction environ-
(4) Control through social norms and feed- ment - decision
back loops Reacting better than planning
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

1.3 Cognitive Fallacies in Organizational Behavior


Vast research efforts have been put into pursuing an understanding of how our minds func-
tion in making decisions. For half a century, behavioral economists have compiled data
on the heuristics and biases that color our judgment. While useful and necessary in most
daily situations, these ‘mental shortcuts’ and ‘routines’ we so often base our judgment on
are deeply flawed and often lead to irrational, suboptimal choices. These fallacies are dan-
gerous precisely because they are so hardwired into our thinking process, because they are
invisible to us. Especially to managers, whose decisions directly influence the success or
failure of an enterprise, these mental traps pose an especially critical threat. To overcome
this threat, awareness of this problem can be the best defense (Hammond, Keeney and
Raiffa, 1998). According to Glendon, Clarke, and McKenna (2016), cognitive fallacies stem
from attribution errors. Attribution theory in general is concerned with how individu-
als interpret external or internal stimuli and translate them into behavior and stems from
Gestalt psychology. Hereby, external or internal stimuli are modified by underlying beliefs,
which in turn structure the cognitive process that determines behavior (see Figure 1.2). At-
tributions are made in the course of this sense-making process: first, to ‘enable an individual
to predict events, and second, to help them to exert control over events’ (Glendon, Clarke,
and McKenna 2016). The errors made in the course of the attribution (‘attributional ef-
fects’) are then referred to as cognitive biases or heuristics. The following section serves
to provide a brief overview of the most common mental fallacies and traps encountered in
human decision-making.

The Fundamental Attribution Error

The fundamental attribution error refers to the tendency to overemphasize the influence of
internal causes as opposed to external ones when evaluating behavior. However, the fun-
damental attribution error only occurs when evaluating other people’s behavior; it reverses
when trying to causally explain an agent’s own behavior (Maruna and Mann, 2006). Thus,
a manager might be tempted to attribute mistakes made by a subordinate to personal char-
acteristics rather than external context. Evidence found by Martinko and Gardner (1987
and Crant and Bateman (1993) suggests that this influences the way managers interact with
their subordinates. Reason (2016) suggests this bias to be circumvented by the ‘substitution
test’, which involves mentally replacing the individual in question with a fictive character
with the same experience, qualifications and background and assessing the likeliness of him
behaving in the same way under the prevailing circumstances.

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1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

Figure 1.2: General attribution sequence. Reproduced from: Glendon, A. I., Clarke, S., and
McKenna, E. (2016). Human safety and risk management, p. 82. Crc Press.

Self-Serving Bias

The self-serving bias is, in some ways, closely related to the fundamental attribution error
and describes the cognitive process by which individuals take credit for personal success
but reject responsibility for personal failures (Shepperd, Malone, and Sweeny, 2008). The
bias is caused by the need to protect and enhance self-esteem (Hughes and Beer, 2013) and
avoid blame (Bradley, 1978). In the organizational context, the self-serving bias can have
detrimental effects to team structures, promotion policies, risk management11 , and future
planning12 (Larwood and Whittaker, 1997).

11
The self-serving bias might cause an overestimation of the risk stemming from external factors and an
underestimation of risk stemming from the managers’ own shortcomings.
12
Managers tend to overestimate their own capabilities and underestimate their flaws (Larwood and Whit-
taker, 1997).

15
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

Availability Heuristics

The availability heuristics was fist described by Tversky and Kahneman (1974) and stands
for the tendency to overestimate the likelihood of occurrence of events. It is caused by
the usage of the heuristics that an event is ‘likely or frequent if instances of it can be
readily brought to mind’ (Glendon, Clarke, and McKenna 2016). This leads to individuals
exaggerating the probability of events that are either easy to imagine or recall or especially
dramatic. Additionally, Lichtenstein et al. (1978) was able to prove that the risk of rare
negative events happening tends to be overestimated, while the contrary holds for more
common adverse effects13 . This is due to a higher exposure to accounts of rare events (be it
through media or direct communication). For executives, this poses a significant challenge,
especially when it comes to risk management and planning activities. One approach to
overcoming this bias is using a ‘systemic approach to hazard evaluation, such as an expert
system or safety auditing’ (Glendon, Clarke, and McKenna 2016).

False Consensus Bias

The false consensus bias (often simply referred to as ‘consensus bias’) denotes the egocentric
‘overuse of self-related knowledge in estimating the prevalence of attributes in a population’
and can be partially traced back to the availability heuristics (Krueger and Clement, 1994).
Ross, Greene, and House (1977) find evidence for this bias in four separate studies, in which
respondents consistently exhibit the tendency to think that their own beliefs are universally
shared. For managers, this highlights the necessity for clear and transparent communication
to avoid misunderstandings. Additionally, in the absence of consensus, executives need to
avoid the assumption that individuals with a differing point of view are defective in some
way.

Anchoring Bias

Anchoring bias (also known as ‘focalism’) refers to the unconscious disproportional impor-
tance placed on the first piece of information obtained (Strack and Mussweiler, 1997). In
the course of the decision-making process, anchoring occurs when an initial piece of informa-
tion is used to make subsequent judgements. Once beliefs have been established, removing
the related association is challenging, even though the initial data is proven to be inaccu-
rate or irrelevant (Hammond, Keeney, and Raiffa, 1998). Mussweiler, Strack and Pfeiffer
13
In a series of 5 experiments with 600 adults, respondents for example estimated the loss of life caused by
murders to be higher than that brought about by strokes – even though the death toll for strokes is ten
times higher than that of murders (Lichtenstein et al., 1978).

16
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

(2000) suggest that considering the opposite and enumerating reasons that speak against
the anchor help reduce the bias.

Confirmation Bias

Confirmation bias relates to ‘the seeking or interpreting of evidence in ways that are partial
to existing beliefs’ (Nickerson 1998). Simply speaking, this refers to individuals seeking out
information that confirms or supports their hypothesis, instead of applying the scientific
method of testing their assumptions. In a business setting, confirmation bias can lead to
flawed decisions in all areas: from faulty market research to regrettable hiring decisions or
bad investment choices. As one of the most detrimental fallacies executives face, it can be
avoided by deliberately seeking evidence that contradicts the viewpoints in question.

Status Quo Bias

Both Samuelson and Zeckhauser (1988) and Kahneman, Knetsch, and Thaler (1991) coined
the term ‘status quo bias’ with their research in the early 1990s. This mental fallacy connotes
the disproportional preference for maintaining the current state, even under conditions
which might be less favorable than an alternative. The status quo bias is closely related
to loss aversion14 , remorse avoidance15 and the endowment effect16 . For organizations, the
biggest threat in the status quo bias is the inflexibility and inertia it causes. Due to its
entrenchment in routine processes and patterns, a suggested countermeasure to the status
quo bias is the breaking up of these structures. An introduction of an external viewpoint as
well as the usage of objective measures to assess alternatives and compare them to the status
quo would also be recommendable. Bostrom and Ord (2006) develop the so-called ‘reverse
test’ to circumvent the status quo bias: by rephrasing the question from What happens
if I change the observed parameter? to What happens if I do not change the observed
parameter?, the decision-makers are forced to defend their conservation of the status quo.

14
The preference for avoiding losses rather than receiving equivalent gains (Kahneman, Knetsch, and Thaler
(1991)
15
Remorse (also often called regret) avoidance describes the fear that a decision will be suboptimal in
retrospect and is closely associated to risk aversion. The ‘regret theory’ was first proposed by Graham
Loomes and Robert Sugden in 1982.
16
The endowment effect designates the hypothesis that individuals ascribe a higher value to items merely
because they own them (Kahneman, Knetsch, and Thaler (1991).

17
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

1.4 Attractiveness Bias


While most of these concepts have been extensively analyzed and covered in academic re-
search in relation to their effect on organizational behavior, the attractiveness (or, in
some sources, attractivity) bias has found little coverage in academic literature. Accord-
ing to Whitley and Kite (2009), attractiveness bias denotes the ‘differential treatment of
individuals based on their physical appearance’. That individuals which are perceived to be
physically attractive receive better treatment in many domains of everyday life is almost a
truism (Lee, Pitesa, Pillutla, and Thau, 2015). This effect is reinforced by the implicit per-
sonality theory formulated by Asmore (1981), according to which single personal attributes
(such as personality traits of outward appearance) are linked to inferences and expectations
about other personal attributes. Eagly et al. (1991) demonstrate that perceived ’attrac-
tiveness’ or lack thereof is connected to a number of other personal dimensions, such as
social and intellectual competence. However, little analysis has been done to what extent
this affects organizational behavior.
Dipboye, Fromkin and Wiback (1975) first demonstrate that attractiveness bias is also
prevalent in a workplace setting17 . Cann, Siegfried and Pearce (1981) found that sex and
outward physical attributes of a subject affect the hiring decision, with males with favor-
able physical attributes being favorably discriminated18 . Judge, Hurst and Simon replicated
these results using longitudinal data from the Harvard Study of Health and Life Quality
(2009). However, the aforementioned studies focus solely on attractiveness bias in candidate
selection decisions and do not differentiate between gender-specific differences in attrac-
tiveness bias (‘Do women discriminate more based on physical attractivity or vice versa?’).
While it is true that selection decisions are ‘among the most important determinants of
career success’ (Gatewood, Feild, and Barrick, 2008), attractivity bias prevails throughout
all domains of the workspace.
Hamermesh and Biddle (1994), Mobius and Rosenblat (2006) and Johnson (2010) analyze
the effect of outward appearance on remuneration and promotion, finding a significant wage
premium for more attractive individuals. Hamermesh and Biddle (1994) find that individ-
uals lacking attractivity are punished by a textit ‘plainness penalty’ in their remuneration
independently from their field of occupation – an effect true for both genders. However,

17
In a study with 30 college students, respondents were asked to evaluate fabricated resumes on suitability
for managerial position. Both gender and attractivity discrimination were found to be significant.
18
In this study, 96 male and 148 female respondents were asked to evaluate the qualifications of ‘unattrac-
tive’, ‘average’ and ‘attractive’ candidates. Respondents were either asked to first rate specific quali-
fications and then formulate a hiring decision or vice versa. It was found that while the order of the
rating/hiring decision did not affect the hiring decision, sex and attractiveness did.

18
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

unattractive women are found to have lower labor force participation and marry men with
less human capital. Applying status generalization theory19 , Johnson finds that individ-
uals perceived as less attractive tend to get promoted less. In addition to this, Mobius
and Rosenblat (2006) reach the conclusion that higher physical attractiveness increases
self-confidence, which in turn tends to raise perceived competence. However, even when
controlling for self-confidence, individuals with higher attractiveness exhibit greater social
and communication skills, which increase their favorable impression with employers and
thus boosts their wages.
The effect of attractivity bias on interpersonal relationships and the willingness to coop-
erate was explored by Mulford, Orbell, Shatto, and Stockard (1998). Using a version of the
prisoner’s dilemma in a laboratory setting, Mulford (et al.) find that not only are subjects
more likely both to enter a game and cooperate with individuals they perceive as attractive,
but also point out some differences in gender: men whose self-perception is ‘attractive’ co-
operate more often than ‘average’ men, while the contrary is true for women. In addition,
subjects with a higher self-perceived attractivity showed a preference for cooperation with
other attractive individuals. In the organizational context, Lee et al. propose that the ’two
fundamental types of interdependence in organizations—cooperation and competition—result
in an opposing pattern of attractiveness discrimination’. This signifies that decision-makers
discriminate in favor of individuals they perceive as attractive when the aim is to cooperate,
while discriminating against attractive individuals when they expect to compete with them.
This is especially important for team dynamics, interpersonal relationships such as between
employer and employees and all questions of collaboration.

Gender-specific differences in attractiveness bias were further examined by Luxen and


Van De Vijver (2006) and Agthe, Spörrle and Maner (2010). The latter suggest that when
an individual is of the same sex as the decision-maker, attractive individuals are discrimi-
nated against. Luxen and Van De Vijver reach similar results and interpret them from an
evolutionary intersexual perspective, in which intra-gender competition causes discrimina-
tion. This shows the interdependency between a decision-makers choice and the individual
being evaluated. Lee et al. (2015) suggest framework of task-related interdependence to
model when and why decision-makers discriminate based on attractiveness (see Figure 1.3).

19
Status generalization theory refers to the ‘process by which statuses of actors external to a particular
interaction are imported and allowed to determine important features of that interaction’ (Webster and
Driskell, 1978), such as for example white male executives rising to executive positions disproportionately
to their abilities.

19
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

Figure 1.3: Task-related interdependence. Reproduced from: Lee, S., Pitesa, M., Pillutla,
M., and Thau, S. (2015). When beauty helps and when it hurts: An organi-
zational context model of attractiveness discrimination in selection decisions.
Organizational Behavior and Human Decision Processes, 128, 15-28.

While these studies all yield significant results, research outside the laboratory setting
is limited. Hamermesh (2006) aims to circumvent this problem and analyzes different
photographs accompanying elections to office in the American Economic Association. He
concludes that an exogenous increase in outward perceived attractivity raises a candidate’s
chance of success, with men benefitting from a higher ‘beauty premium’. However, the
study is based on attractiveness ratings done by four PhD students, which, mainly due to
the subjective nature of attractiveness, might render a limitation of the representativeness
of the study.
All in all, it can be said that even though research on attractiveness discrimination can be
found in academic literature, it lacks two important factors: first, general insights into the
gender-specific differences in attractiveness discrimination (‘Do women discriminate more
based on attractiveness than men?’ ); second, the application of data outside the laboratory
setting. This study aims to bridge this research gap.

1.5 Gender-Specific Differences in Bias


That the inner biological workings of the brain diverge between both genders is a fact
– ‘sex-specific differences in dopaminergic, serotonergic, and gamma-aminobutyric acid
(GABA)ergic markers indicate that male and female brains are neurochemically distinct’
(Cosgrove, Mazure, and Stanley, 2007). In most recent years, most probably due to the
influx of women into the workforce, academic research has focused extensively on these
gender-based differences in decision-making. How exactly these biological differences affect
the human decision-making process is, however, still a largely open question.
When it comes to general behavioral traits, one finding is consistent across academic

20
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

literature: women are more risk-averse than men (Powell and Ansic, 1997; Jianakoplos
and Bernasek, 1998; Croson and Gneezy, 2009). These findings are closely related to the
results of the Iowa Gambling Task20 , in which women on average perform more poorly than
men (Weller, Levin, and Bechara, 2010) and are found to exhibit higher loss aversion bias
than men (van den Bos, Homberg, and de Visser, 2013). Independently from the Iowa
Gambling Task, Gächter, Johnson and Herrmann (2007) find women to exhibit more low-
averse behavior even in risk-free scenarios. The Iowa Gambling study renders additional
insights into the decision-making process of both genders: while women tend to consider all
aspects of a problem, men process information more selectively and focus on global aspects
of the information (van den Bos et al, 2013). Furthermore, females tend to understand
and integrate both subjective and objective information and include all available details
(Mayers-Levy and Maheswaran, 1991). While this leads to advantages in many different
contexts, the Iowa Gambling test relies solely on objective information.
Building on findings from Cosgrove et al., Ashare, Norris, Wileyto, Cacioppo and Strasser
(2013) examine these gender-specific differences in the context of behavioral biases. In their
research, Ashare et al. analyze the evaluation of affective stimuli (such as the positivity
offset and negativity bias21 ) based on differences in serotonin-receptor genes22 . Ashare et al.
(2013) find gender differences in the functioning of the serotonin receptor, implying there
is a biological basis for gender differences in decision-making and information processing
process. Ladenburg and Olsen (2008) conduct an empirical study to assess gender-based
differences on the anchoring bias, finding that women are significantly more susceptible to
being influenced by an initial piece of information in their subsequent decision-making.
This paper aims to enrich the existing literature by examining gender-based differences in
attractiveness discrimination.

20
The Iowa Gambling Task (IGT) refers to a psychological experiment to simulate decision-making. It was
first developed by researchers at the University of Iowa, to which it owes its name. In the experiment,
respondents were presented with four virtual decks of cards composed of ‘reward’ and ‘punishment’
cards. Due to this mixture of cards, some decks can be classified as ‘bad’, while others are counted as
‘good’ decks. The goal of the game is to maximize the amount of money won over the entire course of
the game.
21
The positivity offset is an effect in psychology in which individuals rate neutral situations as moderately
more positive than they really are. This stands in direct contrast to the negativity bias, which states
that when experiencing positive and negative stimuli of equal intensity, the negative stimulus will have
a greater effect on the general state of well-being than the positive one.
22
Serotonin is a neurotransmitter that regulates the tonus of blood vessels as well as the general sense of
well-being, which is why it is sometimes also labelled the happiness hormone (incorrectly so, as it is not
a hormone)

21
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

1.6 Preferences in Partner Selection


Economists have found men and women to elicit different preferences in consumption and
investment markets, the labour market, as well as the dating and marriage markets.23
Interest in the latter social interaction follows from the seminal work by Gary S. Becker
(1973) who formalized the marriage decision as one based on assortative matching of partner
attributes such as age, education, wealth, and physical appearance. To take an example,
in the case of positive sorting over physical appearance, a beautiful female is most likely to
form a match with a good looking male, and vice versa.
Ever since, a multitude of academic literature strove to answer what men and women
look for in their partner. Especially online-dating sites prove to be a goldmine in this
area of research: Fisman et al. (2006) use data from a speed dating experiment to assess
partner preferences and find that while women put more weight on their potential partner’s
intelligence and race, men discriminate more based on attractiveness. In addition to that,
Fisman et al. observe that in the partner selection process, men discriminate negatively
against women whose intelligence and ambitions exceed their own. These findings are
supported by a follow-up study two years later, in which Fisman et al. (2008) further discern
the same-race preference in dating, identifying a stronger same-race bias in women than men
which only decreases with older or more attractive subjects. These findings are consistent
with most academic research in the area, postulating that men discriminate more strongly
based on attractiveness (Sprecher, Sullivan, and Hatfield, 1994)24 – or, to quote evolutionary
psychologist Buss (1994, p. 58): ‘men’s greater preference for physically attractive mates
is among the most consistently documented psychological sex differences.’. Bjerk (2009)
surmises that the above-described preferences might as well be based on biological factors,
with men having an ’innate tendency to favor beauty’. Alternatively, he suggests that both
genders have the same underlying preferences, which vary only due to different earnings
outcomes across genders25 .

23
For a recent survey on gender differences in preferences, see Croson and Gneezy (2009).
24
Sprecher, Sullivan, and Hatfield (1994) use nationwide data from the National Survey of Families and
Households to establish partner preferences for men and women, finding a significant tendency for male
respondents to prefer physically attractive women, while females prefer men with higher income levels.
25
Bjerk argues that individual utility is increasing both with a partner’s attractiveness and their income
while marginal utility decreases with high individual earnings. This leads to higher preferences for
attractiveness in high-earnings individuals, which, on average, still tend to be male. Additionally, the
situation reverses for low-income individuals, who attain a higher utility from a partner’s high earnings
than from their attractiveness. Hence, even if males and females have ex ante identical underlying
preferences, males and females can still have different priorities on average in the marriage market if
males generally enter the marriage market with higher earnings trajectories than females.’

22
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

In addition to this, Regan et al. study the differences in preference based on short-
term and long-term partnerships. They observe that while women indeed place more value
on characteristics pertaining to social status and men prefer physical attributes for long-
term romantic relationships, both men and women discriminate strongly based on physical
attractivity when it comes to short-term romantic relationships.
Hitch, Hortaçsu and Ariely (2010) study the economics of match formation using a data
set acquired from an online dating platform to devise a model of partner preferences. They
identify several factors determining partner selection: similarities in ‘age, education levels,
and physical traits such as looks, height, and weight’ seem to be the prevalent variables.
This is in line with Kalmijn (1998), who postulates that partner selection is largely based
on homogeneity. This however does not necessarily reflect a specific preference for a partner
with similar attributes as the decision-maker but might rather be based on the dispropor-
tional amount of time individuals spend surrounded with others similar to themselves.

Summary
Contrary to what economic models postulated up until the 1950s, the decision-making
process is laden with irrational thought patterns, cognitive fallacies and heuristics. The
three pillars decision theory is based on - rationality, risk and uncertainty, and utility theory
all have been shown not to reflect reality accurately. New, adjusted models have arisen in
their stead, trying to compensate for the flaws inherent in their predecessors: be it Simon’s
bounded rationality model, Bowles and Gintis’ homo reciprocans, Tversky and Kahneman’s
prospect theory or two-system-model or the subjective expected utility theory.
Different cognitive biases have been extensively documented and analyzed in academic
literature. From attribution errors to mental accounting, anchoring and confirmation biases
- researchers have identified countless mental traps that color the decision-making process.
The effect of these biases on organizational structures has been at the core of a multitude
of research papers aiming to aid managers and executives to make better, more informed
choices.
More recently, probably due to the high influx of women not only into the labor mar-
ket, but also into executive positions, researchers have started looking into gender-specific
differences in decision-making. While some consensus prevails on general risk attitude and
basic information processing (inclusive for women vs. selective for men), many realms of
gender-based differences have been left unexplored. One of such is the attractiveness bias,
which is at the core of this paper. There seems to be a consensus that men discriminate
more strongly according to attractiveness (Sprecher et al., 1994; Fisman et al. 2006; Croson

23
1 Decision-Making and Attractiveness Bias in the Context of Organizational Behavior

and Gneazy, 2009; Hitch, Hortaçsu, and Ariely, 2010). On the other hand, a handful of
recent studies find the opposite with women discriminating more on the basis of looks than
men (Belot et al., 2008).
Applying findings from literature on preferences in partner selection, this study aims to
synthesize these findings and extrapolate them on the organizational context. And while
these preferences in partner selection might not at a first glance relate to the organizational
context, they certainly shed light on the question which gender discriminates more strongly
based on attractiveness. Pollard (1999) and Lee (2005) both observe significant effects of
implicit or unconscious biases in professional settings, especially so in hiring and selecting
processes. Tallerico (2014) further argues that such implicit biases give rise to a systemic
bias26 in the hiring and promotion process, which is designed to favor attractive applicants.

1.7 Hypotheses
Based on the preceding academic literature, this paper aims to demonstrate that:

Hypothesis 1. Outward physical appearance and perceived attractiveness are correlated


with selection decisions.
Hypothesis 1.1. The correlation between perceived attractiveness and selection decisions
displays a significant difference between both genders.
Hypothesis 2. The impact of the attractiveness bias is independent from individual char-
acteristics such as age, race, region and profession.

26
Systemic bias refers to the underlying tendency of a process within an organization/institution to be
biased towards a particular outcome. This can for example refer to a racially biased university admission
process or, on the contrary, a scholarship program that favors minorities (affirmative action).

24
2 Data and Methodology

The data in this paper are based on the reality television dating show Dating in the Dark,
first created and aired in the Netherlands (‘Daten in het Donker’ ) on April 6, 2009. The
concept and format of the show has been reproduced in a number of other countries in-
cluding Australia, Brazil, Denmark, Germany, France, Norway, Sweden, Turkey, the United
Kingdom, and the United States. The analysis is based on a total sample of 45 episodes
from Australia (7), Brazil (6), Netherlands (8), UK (13), and the USA (11).1

2.1 The Dating Experiment


Dating in the Dark follows a group of three men and three women who reside in separate
parts of a luxury house, and are unable to interact with participants of the opposite gender,
except for when occupying the ‘dark room’ (where they are unable to see anything).2 The
first compulsory meeting and date involves the entire group of participants, during which
they sit around a table inside the dark room and introduce themselves to others, learning
everyone’s voices, character and personality types. Following this date, each participant
is allowed to invite another participant of the opposite gender for a private one-on-one
date inside the dark room. Participants then go on multiple and repeated dates with their
partner of choice, progressively learning and becoming mentally attracted (or not) based
on the personality trait only.
To somewhat alleviate the informational problems between partners, the host provides
participants with personality profiles showing which contestants are best matched based
1
The available episodes were streamed and viewed at (i) the official television channels that broadcasted
the show (e.g. the Dutch version can be found at www.rtl.nl/liefde/dateninhetdonker/home/),
and (ii) a number of private channels on YouTube (www.youtube.com) by entering the search term
“Dating in the Dark ” for the AUS, UK, and US versions, and “Romance no Escuro” for the
Brazilian version of the show. For a sample episode (USA version, Season 1, Episode 1), see
http://www.youtube.com/watch?v=i7DHObWGBrM. A full summary of country-specific shows and other
details can be found at http://en.wikipedia.org/wiki/DatingintheDark
2
In five of the episodes from the UK, there were 4 males and 4 female contestants. Also, during one ‘special
edition’ of the show, the distribution of gender was made unequal with 3 male and 4 female participants
present.

25
2 Data and Methodology

on a compatibility test. Similarly, depending on the episode, the host shows the male and
female groups some video footage of inside their own homes; reveals some of the personal
items brought to the show; or invites sketch artist to draw each participant’s impression of
their partner.
Following the one-on-one dates, each participant decides if they wish to observe the
physical appearance of another participant, i.e. their ‘personality’ partner. To do so, a
participant must first invite their partner (via an email message) and then wait for them
in the dark room. Participants who do not wish to reveal their appearances leave the show
immediately, without informing the other gender group. This action mainly results when
contestants dislike the personality of each potential partner, and thus cannot identify a
‘soul mate’ on the show. Those who do comply, then enter the dark room for one last
time and reveal their looks to each other in succession. While being revealed in the light,
a participant cannot observe or hear any reactions, with their personality partner standing
silently at the other end of the dark room.
Finally, after learning about the physical appearance of their personality partner, each
participant makes one final and important decision on whether or not to go on a formal date
after the show? Participants reveal their preferences by either walking to the main balcony
(‘Yes’), or by exiting the main entrance door of the house (‘No’). By choosing to meet on
the balcony signals that participants prefer each other’s physical and mental attributes. On
the other hand, walking away from their personality partner reveals distaste for the person’s
physical appearance. Thus, in the second stage of the show, participants are able to reject
their personality partners based on the attractiveness attribute alone. The latter is used in
this study as a decision variable signifying discrimination based on physical appearance.
It is also possible for participants to be found mentally attractive by (and later to reveal
their looks to) more than one member of the opposite sex (this situation will loosely be
referred to as ‘many-to-one matching’). In such situations, during the final decision, this
‘popular’ decision maker faces a multinomial set of partners with different personality and
beauty attributes available. However, each member of the multiple interested party still
faces the desired singleton choice set of partners (that is, whether or not to wait for the
popular individual) and makes a choice purely based on the partner’s physical attributes.
In such a case of many-to-one matching, the popular decision maker (‘one’) is unable to
clearly discriminate based on the personality and looks of a single partner, since differences
across partner attributes determine the final choice. To identify such choice behaviour and
preferences, it would be required to directly measure the ‘personality’ and ‘attractiveness’
attributes, which is unfortunately not possible. To this end, the choice behaviour of the
‘one’ participant when many-to-one matching is present is not recorded. Overall, this leads

26
2 Data and Methodology

to a smaller sample of decisions than possible when only one-to-one matching prevails. The
latter issue as well as participants walking out prior to revealing their looks (that is, not
finding a ‘personality partner’ at all) results in a total sample of 222 revealed choices.3

2.2 Participant Characteristics


Table 2.1 below defines and summarizes the main observed participant characteristics.

Table 2.1: Sample participant characteristics


Variable Description µ σ Min. Max.
Age Years of age 27.02 4.62 18 48

Gender = 1 if female 0.53 0.50 0 1


0 if male

Race = 1 if White 1.41 0.75 1 3


2 if Black
3 if Hispanic

Occupation = 1 if low skilleda 1.9 0.79 1 3


2 if average skilledb
3 if high skilledc

Region = 1 if United States 3.06 1.82 1 7


2 if United Kingdom
3 if Australia
4 if Brazil
5 if Italy
6 if Netherlands
7 if Denmark
a b c
e.g. student; e.g. high school teacher; e.g. business manager

In addition to the above decision variable, a limited set of revealed participant charac-
3
The total number of participants that appeared over the sampled episodes is 281. Four percent (11)
of these individuals correspond to the ‘popular’ type described above, who attracted more than one
personality partner. The remaining 48 contestants failed to find a personality partner and hence walked
out after the first stage of the show/experiment.

27
2 Data and Methodology

teristics was recorded, including: the age of participants, gender, racial background, and
occupation. The age and occupation variables were displayed on the screen next to each
participant’s name at the start of an episode, while the gender and race characteristics
had to be visually observed and recorded (by the researcher). The variables were assigned
numeric values (1-3 for race and occupation-related variables, 1-7 for the region variable)
in order to enable a later analysis.
The average age of participants was 27, with the youngest and oldest participant being 18
and 48 years old, respectively. Within the sample, there are slightly more female decision
makers (54%), indicating that more men (than women) left during the first stage of the
experiment (could not find a personality partner), or had more than one personality partner
(see the discussion above). In terms of racial background, the majority of contestants were
white (75%), followed by the hispanic (17%) and black groups (8%). Due to the young
age of participants, the sample distribution of occupations is comprised of relatively fewer
senior professionals: low-skilled (36%), average-skilled (38%), and high-skilled (26%).

2.3 Empirical Approach


To better understand the choice behaviour and preferences that can be inferred from the
data, let the utility that participant i derives from dating partner j be given by

uij (pj , aj ; βi ) (2.1)

where pj is the personality attribute of partner j; aj is the attractiveness attribute of j;


and βi ∈ [0, 1] denotes the relative utility weight participant i attaches to aj (where the
utility weight on pj equals 1 − β). Since no direct or subjective measures of pj and aj
are obtained, it is not possible to estimate the corresponding preference parameters using a
structural econometric model. Nevertheless, given the design of the experiment, individuals
can be indirectly identified eliciting a particular range of the utility weight attached to the
physical attributes of a partner, βi .
Recall that during the second stage of the experiment, participant i is observed to make
a partner choice based on aj conditional on i being mentally attracted to j (that is, βi
6= 1). Let yij represent an indicator variable of this ‘Yes/No’ decision that equals 1 if i
prefers j after observing aj , and 0 otherwise. Then, there exist three possible parameter
βi ranges that could be encountered. First, there are participants (decision makers) of
the type “I like the personality, and I like the looks” (accept pj , accept aj ), and for whom
yij = 1. These individuals are content with both their partner’s personality and outward
appearance attributes, and hence could assign a utility weight to perceived attractiveness

28
2 Data and Methodology

from the entire range 0 ≤ βi < 1. On the other hand, there also exist those participants of
the type “I like the personality, but I don’t like the looks” (accept pj , reject aj ), for whom
we can observe both the decision yij = 1 and yij = 0. For those contestants who decided
to go on a date with their personality partner (‘Yes’), it is known that βi < 0.5 since they
do not prefer the looks of their partner, however still promise to go on a date with them
after the show (for these individuals; partner looks are less important than personality).
Finally, participants who decide not to go on a future date (yij = 0) reveal a higher relative
preference for attractiveness βi > 0.5, i.e. looks are more important than personality. The
latter type of individuals is labeled as ‘attractiveness discriminators’.
The main focus in this paper is to test for gender differences in the choice behaviour of
the latter type of individuals. To do so, the analysis is based on regressions of the form

Discriminateij = (δ0 + δ1 Xi + δ2 Xj + δ3 Xi Xj ) Femalei + δ4 Zij + ij (2.2)

where the dependent variable equals 1 if participant i rejects partner j upon observing his
or her Attractiveness, and 0 otherwise; Femalei is an indicator variable that equals 1 if
participant i is a female, and 0 if a male; Xi = [ Agei , Racei , Occupationi ] and Xj = [ Agej ,
Racej , Occupationj ] are vectors of other personal characteristics describing participant i
and partner j; Zij includes show-specific variables, namely the ‘Region’ (or country) of
production; and ij is an iid random error term capturing the unobserved variables and
other idiosyncratic preference shocks. As any observed degree of gender differences in beauty
discrimination may also depend on other ‘own’ and ‘partner’ characteristics, corresponding
interaction terms to control for such heterogeneity have been included.

29
3 Results

3.1 Preliminary Data Analysis


First, a preliminary data analysis is conducted to assess the applicability of the data to
the research question. To this aim, attractiveness discrimination rates are computed for
each group. To this end, participants are classified based on their gender (male or female),
their age (young for participants ≤ 30 years of age, mature for participants above 30 years
old), their race (white, black or hispanic), their occupation (low skill, average skill and high
skill professions) and the geographic region they live in (US, UK, Australia, Brazil, Italy,
Netherlands or Denmark). To test for differences between the discrimination rate means,
a parametric Z-test of differences is conducted. For within-region comparison, the UK is
taken as a base scenario (due to its large sample size).
This preliminary analysis of the data shows at a first glance that Hypothesis 1 can be
proven: participants clearly discriminate based on the outward appearance - or attractive-
ness - alone.
Table 3.1 reports rates of discrimination on the basis of physical appearance for different
groups of individuals. Overall, 29% of the participants rejected their ‘personality’ partner,
suggesting that looks do matter in general. At the same time, strong gender differences in
beauty discrimination are present with females discriminating 34% of the time, compared
to a rate of 22% by males. Hence, based on the raw data, women seem to place a rela-
tively greater utility weight on physical appearance than men (p = 0.01). The latter result
contradicts that found by Fisman et al. (2006), where male students were found to care
more about looks than females in their speed-dating experiment. Our finding is however
consistent with a more recent study by Belot et al. (2008) based on the Dutch television
game show ‘Does (s)he share or not?’, where the authors find women to discriminate more
against the least attractive player than men do so.
There are no apparent differences in beauty discrimination across age, race, and occupa-
tion type; with most of these subgroups rejecting their personality partners at an average
rate of about 30%. However, we do observe a significantly higher rate of attractiveness
discrimination by participants based in the United Kingdom (38%) relative to those in the

30
3 Results

Table 3.1: Attractiveness discrimination by group


n Discrimination Test of Difference
Rate
Overall 283 0.29 (0.45)
Male 132 0.22 (0.42)
Female 151 0.34 (0.48) 0.01 pb(f emale) > pb(male)

Young 211 0.29 (0.45)


Mature 72 0.28 (0.45) 0.85 pb(mature) 6= pb(young)

White 211 0.29 (0.45)


Black 28 0.25 (0.44) 0.66 pb(black) 6= pb(white)
Hispanic 44 0.30 (0.46) 0.93 pb(hispanic) 6= pb(white)

Low skill 104 0.24 (0.43)


Avg skill 104 0.31 (0.46) 0.28 pb(avgskill) 6= pb(lowskill)
High skill 75 0.32 (0.47) 0.24 pb(highskill) 6= pb(lowskill)

US 57 0.25 (0.43)
UK 89 0.38 (0.23) 0.04 pb(uk) > pb(us)
Australia 39 0.23 (0.43) 0.05 pb(aus) < pb(uk)
Brazil 40 0.30 (0.46) 0.18 pb(bra) < pb(uk)
Italy 6 0.17 (0.41) 0.14 pb(ita) < pb(uk)
Netherlands 40 0.25 (0.44) 0.07 pb(ned) < pb(uk)
Denmark 12 0.08 (0.29) 0.02 pb(den) < pb(uk)

‘Discrimination rate’ is the proportion of participants that chose not to date their ‘personality partner’
after the partner’s looks were revealed. Young if age ≤ 30; Mature if age > 30. Standard deviations in
parentheses. The resulting p-values from parametric Z-tests of differences between sample proportions
are reported in the fourth column. For within-region comparison, the UK is taken as a base scenario
(due to large sample size).

United States (25%), Australia (23%), and the Netherlands (25%). The 15 percentage
point (positive) difference in beauty consciousness is broadly consistent with the more than
110% increase in expenditure on cosmetic surgery and other beauty enhancing treatments
by British households between 2005 and 2010 (BAAPs 2010), compared to a notably lower
77% increase observed in the USA since the year 2000 (ASPS 2010). This type of social
development (of ’keeping up physical appearances’) in the UK is also supported by the

31
3 Results

growing number of men and especially teenagers receiving beauty treatments (with individ-
uals from the latter group entering the dating market for the first time).

3.2 Gender Gap


To further explore the above gender gap and potential within-gender heterogeneity, a linear
probability model of participant decisions (Eq. 2.2) is estimated. Hereby, the dependent
variable (t̄he discrimination rate) equals 1 if participant i rejects partner j upon observing
his or her attractiveness, and 0 otherwise; Femalei is an indicator variable that equals 1 if
participant i is a female, and 0 if a male; Xi = [ Agei , Racei , Occupationi ] and Xj = [ Agej ,
Racej , Occupationj ] are vectors of other personal characteristics describing participant i
and partner j; Zij includes show-specific variables, namely the ‘region’ (or country) of
production; and ij is an iid random error term capturing the unobserved variables and
other idiosyncratic preference shocks. As any observed degree of gender differences in beauty
discrimination may also depend on other ‘own’ and ‘partner’ characteristics, corresponding
interaction terms to control for such heterogeneity have been included.
Table 3.2 presents the marginal effect estimates for different model specifications. The
first model version (1) is limited to the basic independent variables: gender, age, race and
occupation. The second model form (2) includes the region term, while the third model
adaptation (3) further focuses on the interaction between ‘own’ and ‘partner’ characteris-
tics. The third model adaptation (3) is then expanded to observe both genders separately,
excluding decision-makers of the opposite gender completely. This is done in order to isolate
gender-specific effects on to the other independent variables. The overall achieved R2 (the
proportion of the variance in the dependent variable explained by then model) is respec-
tively 3% for model variant (1), 6% for model variant (2) and 8% for model variant (3).
Considering the gender-split model version, the R2 is 11% for only ‘female’ decision-makers
and 8% for ‘male’-only agents.
The mean propensity of rejecting a personality partner on the basis of outward appear-
ance is found to be approximately 15 percentage points higher for females relative to males.
This estimate of the main gender effect is robust to almost all of the presented specifica-
tions at a 1% significance level for all three model variations. Age, occupation and race
yield no significant results on the discrimination rate in none of the specified model forms.
As observed above, the ‘region’ variable is significant for some geographic regions: both
the US and Australia exhibit a significantly lower discrimination rate than the UK (US
and Australia by roughly −15%) for the second model variant (2), and US −20% for the

32
3 Results

Table 3.2: The effect of participant and partner attributes on the probabil-
ity of attractiveness discrimination

Linear probability model; robust standard errors in parentheses. The dependent variable in all regressions is
‘Discriminate’; that is set to 1 if the participant chose not to date their ‘personality partner’ after the partner’s
looks were revealed, and 0 otherwise. ‘Female’ is an indicator variable that takes on a value of 1 if the participant
is female, and 0 if male. ‘Mature’ is an indicator variable that equals 1 if the participant is > 30 years old, and 0
otherwise. * significant at 10%; ** significant at 5%; *** significant at 1%.

33
3 Results

third model version (3)). In addition to this, significant results can be observed for the
male-only model version: men in the US and Australia discriminate less than their female
counterparts, by almost 30% in both cases. This is significant on a 5% significance level
for the specified parameters. As to the interaction term, neither occupation nor race of
the partner demonstrate significance in any of the specified model forms. However, the age
of the partner seems to matter: mature partners get rejected, on average, 15.4% more in
the general model variant and 20% more in the gender-specific model adaptation for female
decision-makers only. These results are significant on a 5% respective 10% significance level.
The gender-split models point towards two main gender-based differences: first, the
above-described regional differences in discrimination rates, with men from the US and
Australia discrimination significantly less than their female counterparts; second, the higher
age-based discrimination by male participants. Especially the second lies in line with most
academic research, which points towards males seeking, on average, younger female partners
(see e.g. Buss, 1989).
Perhaps a bit surprisingly, none of the other attributes yield significant results. Academic
research into different sociographic preferences for men and women often highlights the
female preference for partners with higher social status (Becker, 1973; Buss, 1994; Croson
and Gneezy, 2009), which does not reflect in the described model. Looking into more detail
in the gender-specific differences in participant attributes (see Table 3.3), we can see only
marginal differences in occupation levels (the average occupation level is 0.294 point higher
for male participants).

Table 3.3: Gender-specific participant differences


Gender Variable Mean Std. Dev. Min Max
Female Occupation 1.757 0.7633 1 3
Age 25.966 3.90 18 40
Male Occupation 2.051 0.795 1 3
Age 27.909 4.686 19 48

This would point towards Bjerk’s (2009) thesis that preferences in partner selection naturally
do not vary across genders but are caused by disparities in income distribution. Bjerk argues
that individual utility is increasing both with a partner’s attractiveness and their income,
while the marginal utility of a partners’ income decreases with high individual earnings. This
leads to higher preferences for attractiveness in high-earnings individuals, who, on average,
still tend to be male. Additionally, the situation reverses for low-income individuals, who

34
attain a higher utility from a partner’s high earnings than from their attractiveness. This
hypothesis will be further examined in section 3.3.

3.3 The Effect of Participant-Partner Similarity on


Attractiveness Bias
Academic literature emphasizes the importance of partner similarities for partner selection.
Exemplary, Hitch, Hortaçsu and Ariely (2010) argue that similarities in ‘age, education
levels, and physical traits such as looks, height, and weight’ seem to be the prevalent
variables in partner choice. This ‘birds of a feather flock together’ -principle in partner
selection is in line with Kalmijn (1998), who postulates that partner selection is largely
based on homogeneity.
In order to deepen the analysis of the above-described interaction between participant and
partner characteristics and any potential similarities between partners, the linear probability
model was expanded (see table 3.4). Hereby, in a first step, the effect of similarities between
partners was analyzed (see model version (1) in table 3.4). In a second step (model version
(2) in table 3.4), the effect of differences between partners, such as an age or income gap,
were subjected to analysis. In both models, interaction terms were included to control
for the additive effects of gender on other independent variables. Again, male and female
decisions were observed together and separately for both models in order to isolate gender-
specific effects on to the other independent variables.
The results of this analysis complement the above-discussed sociographic preferences, as
occupation is the only factor rendering significant results in all model variants. Consider-
ing first participant-partner similarities, significant results are observed for similarities on
occupation. Hereby, the female-specific model variation renders significant results at a 5%
significance level, with women discriminating slightly more against partners of the same so-
cial status than their own (19.5 percentage points). Looking at the interaction term ‘same
occupation × female’, this finding is reinforced: in situations where both partners have the
same occupation, women tend to discriminate significantly more in the general model form
as well. Going into further detail, we can see that women tend to discriminate less against
partners with a higher occupational status than their own (0.203 percentage points; 5%
significance).
These findings are in line with research conducted by Becker (1973), Buss (1994) and Cro-
son and Gneezy (2009) and point towards disproving the same-preference theorem (Bjerk,
2009), as women clearly show higher dscrimination rates against partners with the same
occupation level, with men displaying no such tendencies.

35
Table 3.4: The effect of participant-partner similarity on attractiveness discrimination
(1) (2)
Male Female All Male Female All
Both mature -0.020 -0.028 -0.030
(0.083) (0.094) (0.082)
Same occupation -0.110 0.195** -0.115
(0.083) (0.089) (0.081)
Same race -0.041 -0.100 -0.063 -0.062 -0.085 -0.132
(0.107) (0.116) (0.093) (0.106) (0.111) (0.089)
Age j > age i 0.090 0.124 0.075
(0.102) (0.093) (0.101)
Occupation j > occupation i -0.028 -0.203** -0.048
(0.105) (0.090) (0.103)
Both mature × female 0.011
36

(0.116)
Same occupation × female 0.314***
(0.119)
Same race × female -0.017 0.112
(0.093) (0.093)
(Age j > age i) × female 0.083
(0.133)
(Occup. j > occup. i) × female -0.136
(0.133)
Number of Obs. 102 120 222 102 120 222
R2 0.02 0.04 0.06 0.01 0.05 0.05
Linear probability model; robust standard errors in parentheses. Constant term included in models. The dependent variable in all regressions is ‘Discriminate’;
that is set to 1 if the participant chose not to date their ‘personality partner’ after the partner’s looks were revealed, and 0 otherwise. ‘Both mature’ is an
indicator variable that takes on a value of 1 if both the participant and partner are > 30 years old, and 0 otherwise. ‘Same occupation’ is an indicator variable
that takes on a value of 1 if the participant and partner have the same occupation level, and 0 otherwise. ‘Same race’ is an indicator variable that takes on a
value of 1 if both the participant and partner are of the same racial background (white, black, hispanic), and 0 otherwise. i denotes the participant, j denotes
the partner. * significant at 10%; ** significant at 5%; *** significant at 1%.
3 Results

Results Summary
Overall, this study sheds light on a little-researched topic and gives valuable insights on
attractiveness bias using unique data from a natural experiment. Both the first hypothesis
and sub-hypothesis,

Hypothesis 1 Outward physical appearance and perceived attractiveness are correlated


with selection decisions.
Hypothesis 1.1 The correlation between perceived attractiveness and selection decisions
displays a significant difference between both genders,

could be confirmed. Outward physical appearance is correlated with selection decisions, with
evidence of strong gender differences in attractiveness bias confirmed. Women are found
to care significantly more about physical attributes than men. This finding is robust to a
number of other important characteristics including age, race, occupation, and geographical
region. The second hypothesis,

Hypothesis 2 The impact of the attractiveness bias is independent from individual char-
acteristics such as age, race, region and profession,

could be only partially confirmed. While attractiveness discrimination is independent from


age and race, both occupation and region show a weak impact on attractiveness bias. In
the case of occupation, evidence for strong gender-based differences were found: while men
exhibit no special preference for the sociographic status of their counterpart, female partic-
ipants strongly discriminate against partners of their own social standing and in favor of
partners with a higher occupational level. This finding is robust to a number of character-
istics, tested with a control term and significant at a 5% significance level.
As to the regional differences, a connection between the country’s beauty spending and
the level of attractiveness bias might be assumed. However, such a (cultural) impact on
attractiveness bias would be imprudent to conclude hereupon and warrants further research.

37
4 Discussion

In the following, the results will be discussed in the organizational context. While the
preferences analyzed in the previous section might not at a first glance relate to the business
context, they certainly shed light on a subconscious bias affecting daily behavior. Pollard
(1999) and Lee (2005) both observe significant effects of implicit or unconscious biases
in professional settings, especially so in hiring and selecting processes. Additionally, such
mental traps might give rise to systemic biases in companies and organizations. Biased
selection, hiring, promotion and compensation systems undermine the efficient functioning
of a firm by selecting suboptimal candidates or creating career advancement systems not
rooted in merit and accomplishments, thus giving rise to a whole range of behavior not
aligned to the organization’s goals. As Anton Chekhov said: ‘People should be beautiful in
every way - in their faces, in the way they dress, in their thoughts, and in their innermost
selves.’. Deciding based on just one of these implies a lack of appreciation for the remaining
factors, which will only rarely be aligned with the company’s interest.
To avoid the detrimental effect of such biases, practical implications for HR managers will
be provided based on the functional areas of HR management and organizational decision-
making theory. Moreover, concrete recommendations for actions and process structures
inside organizations will be provided. Lastly, limitations of the present study will be ana-
lyzed and discussed.

4.1 Practical Implications and Recommendations for HR


Managers
First, and maybe most importantly, it needs to be stated that attractiveness bias can, in
some areas, be justified and contribute to the success of the organization. This might be
true for sales or even certain PR positions, where good looks have proven to increase the
success rates of the individual (Hosoda, Stone-Romero, and Coats, 2003). However, it is
important to keep in mind that this is only true in specific areas and should thus be limited
to these.
One of the key findings of this present study is that attractiveness bias prevails throughout

38
4 Discussion

all ages, occupations and races to the same degree. Looking into academic literature, this is
in line with for example findings by Marlow, Schneider, and Nelson (1996), who discover that
there is only a negligible difference between experienced and inexperienced managers when
it comes to attractiveness discrimination. For organizations, this implies the need to train
managers on all levels to counteract subconscious biases; not just these in junior positions.
Developing and instituting mandatory anti-discrimination trainings and guidelines should
thus be a given in the organizational setting. Additionally, the lack of significant differences
between occupation levels means that attractiveness bias is equally relevant for all types of
organizations, with high-skill or technical positions being no exception.
Second, weak evidence of attractiveness discrimination being influenced by geographic
region is found. This implies that attractiveness bias is, to a certain degree, ingrained in a
country’s culture. As observed in the case of the UK as well as Brazil, increased spending
on beauty products as well as cosmetic surgery and other beauty enhancing treatments
might be a good indicator for this. To put this in context of the Russian market: according
to BusinessStat (2015), within the period between 2009 and 2013, Russia’s beauty market
grew by 46%. In addition to this, the sales value of Russia’s cosmetic market in 2015
reached nearly 14 billion dollars, placing Russia 4th in Europe. This could point towards
a stronger attractiveness discrimination in Russian firms when compared to the US or the
Nordic countries analyzed in this study – however, additional research is needed to prove
this culture-specific differences in attractiveness bias.
For managers working abroad or with international teams, this highlights the need for
increased awareness of these cultural differences in cognitive biases. Lastly, women are
found to discriminate significantly more than men (on average by 15%). This is a factor
not to be overlooked: in the US as well as in Europe, HR departments are mainly dom-
inated by women. According to the Bureau of Labor Statistics data (2016), over 70% of
HR managers are female in both countries. Recruiting, which involves the attraction of
applicants for potential employment, and selection, which refers to the identification of ap-
plicants ‘with the necessary knowledge, skills, abilities, and other characteristics that will
help the organization achieve its goals’ (Noe et al., 2013), are areas crucial to circumventing
the attractiveness bias, as it is the place where an individual makes a first impression on
the organization. As Gatewood, Feild, and Barrick (2008) postulate, the first impression
is especially susceptible to attractiveness bias: the outward physical appearance (including
personal style or lack thereof and hygiene factors) might easily overweight the objective
qualification for a position.
HR managers already are aware of the importance of a uniform recruitment and selection
system (starting for example with the formulation of neutral, objective job requirements)

39
4 Discussion

and a neutralized selection process. However, how does this translate into practice?
As attractiveness bias impacts selection decision most (Huffcutt et al., 2011), the following
aims to provide recommendations specific to the selection and hiring process. From a more
practical perspective, this could for example include anonymized applications, which aim
to level the playing field in the first step of the selection process or a trimodal approach
to selection decisions. Should these measures prove difficult to implement (e.g. due to cost
or time constraints or low acceptance), minor adjustments in existing processes can serve
to counteract attractiveness bias. In the following, these three recommendations will be
discussed in more detail.

Minimizing attractiveness bias in pre-selection decisions

Anonymous applications target the first selection step (preselection) in personnel se-
lection procedures, that is, the sighting the application documents before the interview
invitation as compared to actual hiring decisions. In the concept of anonymous applica-
tions, applicants are to refrain from taking a photograph and stating certain biographical
and personal data, such as name, address, date of birth, age, marital status or citizenship
(see Döse, 2012). Thus, the core focus of anonymized applications are the objective factors,
such as work experience and education of a candidate. Unlike the conventional application,
no year numbers are given so that no conclusion on the age is possible. The goal is to
focus the personnel decision-makers on the first selection decision to the qualification and
professional aptitude of the candidate and avert subconscious biases, subjective feelings,
possible prejudices or stereotypes. There are several ways to realize anonymous application
procedures:

• Anonymized online application forms for online applications at the homepage of an


organization

• Anonymized application forms that are made available to the applicant online or in
another form. The completed forms are returned either digitally or by post directly
to the organization

• Subsequent anonymization, e.g. a neutral body of the organization blacks out all
relevant personal information

After completing the first round of selection and deciding which candidates will be invited
to the job interview, the personnel decision-makers then receive the complete documents
of the candidates concerned. In the main selection process, the anonymity is removed and
the applicant has the opportunity to present his strengths unfiltered. The anonymization of

40
4 Discussion

the application documents deprives personnel managers of the subjective information basis
and can be regarded as a means of increasing the objectivity in the preselection decision.
Since the discrimination rate is highest in the first selection stage and falls in the course
of an application process (see Krause et al., 2010, p.4), the use of anonymous application
procedures could be a successful tool for less discriminatory job placement.
Internationally, anonymous applications have long been used in recruitment procedures
(see Krause et al., 2012) and researched through various model projects in different countries
(including Sweden, France, Switzerland, the Netherlands). As Åslund and Skans (2012) find,
such anonymous applications level the playing field in the screening process. These findings
support the results of a study conducted by Watson and Johnston in 2017, during which they
find that discrimination by attractiveness significantly decreases when companies forego an
applicant’s personal information in the first screening process.
International experience shows that the chances of being invited to a job interview are
increasing for certain groups of applicants by anonymized applications. The disadvantage
of such a process for many companies and institutions is the additional work involved in
recruitment and the delay in the selection process. There are also two major difficulties
in the implementation and practicability of anonymous application procedures: On the
one hand, more efficient methods for anonymization must be developed and, on the other
hand, the characteristics to be anonymized must be defined. However, in terms of the non-
objective candidate feature of physical attractiveness, the anonymous application process,
if handled efficiently and methodically standardized, seems to be a tried and tested means
against discrimination.

Minimizing attractiveness bias in selection decisions

The same holds for the interview process itself, where the physical attractiveness as the
first information of an applicant can influence the assessment and thus the further course
of the conversation both positively and negatively. As a result, attractive candidates may
be perceived as more competent, more appropriate, and more likely to be persuasive, as
they are given more time to talk because of their attractiveness by the interviewer (Huffcutt
et al., 2011). Often, interviews are not well-structured enough to minimize the impact of
extraneous candidate characteristics for bias. Schuler and Marcus (2006, p. 220) therefore
advocate the use of a multimodal interview on the basis of the trimodal model of aptitude
diagnostics, which will be described more in detail below.
Personnel selection-relevant instruments can generally be divided into various categories:
on the one hand, personality-oriented procedures which in turn split into characteristics-

41
4 Discussion

oriented and simulation procedures, and, on the other hand, biography-oriented procedures.

Biography-oriented methods of personnel selection


The historical analysis of characteristics and behavior (training, special knowledge, grades,
work experience, etc.) forms the common basis of biographical procedures. These per-
sonnel selection procedures aim to build a predicted behavioral prediction based on past
behavior. The instruments include the analysis of application documents (including cur-
riculum vitae), biographical interviews or job interviews and, in rare cases, biographical
questionnaires. This should provide information about the previous fields of activity of the
applicant and the related work success as well as conclusions about his personal and profes-
sional qualities (Schuler and Marcus 2006). The biographical interview or job interview also
serves to get to know each other personally and to determine the attitudes and values of an
applicant with relevance to the requirement profile of the position in question. At the same
time, the applicant should be informed about the company, the requirements and fields of
application of the respective position. This interview can be carried out completely openly
or partially or fully structured (questionnaire and course are set partly or completely in
advance). The advantages of these procedures are the high acceptance of candidates and
the comparatively low effort, since no comprehensive competences of the personnel decision
makers are necessary for the evaluation. Basically, the instruments used are verifiable or at
least in principle verifiable and relate to the professional background and the professional
past of the applicant.

Personality-oriented recruitment methods


In many organizations, conventional biography-based recruitment procedures are now com-
plemented by psychological tests that are character-based. Such character-oriented proce-
dures aim to capture the candidate’s stable and cognitive characteristics (e.g. intelligence
or ability to concentrate, personality traits, attitudes). There is a large number of stan-
dardized test procedures for the acquisition of cognitive and non-cognitive properties from
differential psychology and aptitude diagnostics for this approach to personnel selection (for
a review and meta-analysis, see Schmidt and Hunter, 2008). Intelligence, performance or
personality tests, for example, can be used as character-oriented personnel selection tools.
The results of such tests are objectively and directly comparable, which counteracts any
potential biases.
Performance tests, on the other hand, are primarily aimed at drawing conclusions about
the individual skills of applicants, for example, their ability to concentrate or their speed
of reaction. In addition, it is often a matter of measuring physiological and task-specific

42
4 Discussion

abilities (Krohne and Hock 2007), based on the concrete job requirements of the position
to be filled. Again, the results are usually well comparable. However, in both methods,
the required effort is significantly greater than in biography-oriented selection process, the
applicant acceptance, however, much lower.
Simulation-oriented methods focus on situation-specific behavior of an applicant in var-
ious work-typical contexts (eg assessment center, work samples, etc.). With simulation-
oriented methods, performance or performance for specific occupational requirements is to
be recorded in realistic simulations. Decisive for the validity of the procedure is the content
validity, in specific the content of the tested activity with the actual occupational activity
and its central elements. This procedure is often used by applicants (for example, new
entrants) who have few biographical information.

Trimodal approach of occupational aptitude diagnostics


The trimodal approach of vocational aptitude diagnostics assumes that the different pro-
cedures are based on their own (validation) logic and accordingly different methods are
required to record the characteristics. In other words: the trimodal approach refers the
joint use of the three approaches and thus should allow a multifaceted consideration of an
applicant. The use of all three diagnostic approaches is optimal, as a complete diagnosis can
only be made by using several different procedures. Additionally, the different occupational
aptitude diagnostic methods are prone to different kind of biases – a combined use of all
three minimizes the overall bias.

Minimizing attractiveness bias in selection decisions through minor


adjustments to existing processes

The usage of trimodal processes or the implementation of an anonymized application is,


however, restricted by resources and time available for selection decisions. In addition,
both require a certain level of acceptance and standardization throughout the labor market
as not to place firms which employ them at a disadvantage compared to peers with less
costly and time-consuming processes.
Thus, simpler methods can be employed to counteract attractiveness bias: more bal-
anced ratios of men and women conducting the interviews is one of these. As the
famous saying goes: beauty lies in the eye of the beholder, which is especially true for the
perception of beauty for men and women. Balanced ratios of interviewer genders could thus
lead to a drastic reduction of attractiveness bias: what she perceives as attractive could be

43
4 Discussion

perceived neutrally by him and vice versa.


Interviews conducted over the telephone can further help to level the playing field in
selection processes. Withholding the applicant’s appearance until later stages of the appli-
cation process reduces both positive and negative effects of attractivity bias and is both
time and cost-efficient to implement.

Minimizing attractiveness bias from an applicant’s perspective

Applicants themselves can play a significant role in averting attractiveness bias. Rather
mundane and obvious actions such as keeping a professional dress code and maintaining
a professional composure and atmosphere during the interview to appropriate mannerisms
and language can go a long way in deterring bias. Additionally, the focus of the interview
should in any case be steered towards and applicant’s objective qualifications. However,
these actions can only go so far in diminishing the negative effects of the attractiveness bias.
As Shanani, Dipboyle and Gehrlein (1993) find, attractiveness bias in face-to-face interviews
affects most significantly female applicants with low perceived attractiveness. Further re-
search into the so-called beauty is beastly-effect suggests that high perceived attractiveness
can be disadvantageous to female applicants applying for traditionally male positions, with
this effect reversing when they apply for typically female positions (Johnson, Podratz, Dip-
boye, and Gibbons, 2010). No such effects were found for male applicants (Johnson et al.,
2010). These findings seem to point towards the obvious advantage of keeping average looks
for female applicants; a feat easier said than done.
In a recent research paper on mitigating the effects of the attractiveness bias, Johnson,
Sitzman and Nguyen (2014) find that acknowledging appearance counteracts the negative
effects of the beauty is beastly-effect. In their paper, Johnson et al. analyze the effect of
highly attractive female applicants acknowledging their looks when applying for typically
masculine positions in three separate studies, finding a positive correlation between this
acknowledgement intervention and reduced attractiveness bias. Exempting this study, very
little academic research has focused on testing methods alleviating or even eliminating such
bias, highlighting the need for further research.

44
4 Discussion

4.2 Limitations
There are two main concerns with the present study: first, the external validity, second,
its applicability to the business context. Regarding the first, it could be argued that the
participants of the show are not representative of the population. While it is true that
primary data on attractiveness bias in organizations would be ideal, it is hard to obtain and
difficult to quantify. The underlying bias is slow-acting, which would require data collected
extensively over the course of many years, as well as implicit, which makes it very hard to
discern from a large amount of data. The clear advantage of the present study is that the
reject or accept decision of participants at the end of the show makes the bias explicit, while
naturally controlling for personality traits. As to the representativeness of participants, it
can be contended that the demographic characteristics of the participants do not greatly
differ from population means regarding race and occupation. Especially the latter proves to
be of great advantage when compared to laboratory experiments, where participants tend
to be very homogeneous (Belot et al., 2012).
As to the applicability of the results on the business context, it can be argued that deeply
ingrained behavioral heuristics and biases are not limited to personal life and greatly affect
the professional context. While there is a consensus in academic research that attractiveness
bias is prevalent in the workspace (see for example Hamermesh and Biddle, 1994; Mobius
and Rosenblat, 2006; and Johnson 2010), little effort has been put into analyzing gender-
specific differences of this particular phenomenon. Additionally, this study is unique due to
shedding light on the effect other personal characteristics, such as age, race and occupation,
have on attractiveness bias.
Lastly, it could be said that the context of a TV show leads to a form of Hawthorne
effect: participants might modify their behavior due to the fact that they are aware of being
observed. However, evidence found by Beetsma and Schotman (2001), Levitt (2004), and
Belot et al. (2012) suggests otherwise. Especially the last stipulates that while participants
might be tempted to modify their behavior away from ‘frowned upon’ actions such as racial
discrimination, attractiveness carries no such stigma.

45
Conclusion

To conclude, this present study has three main findings: first, perhaps surprisingly, women
are found to discriminate based on outward physical appearance more than men (by 15%).
This contradicts most findings in academic literature based on laboratory experiments
(Sprecher et al., 1994; Fisman et al., 2006; Croson and Gneazy, 2009; Hitch, Hortaçsu,
and Ariely, 2010); however, it is in line with recent research conducted by Belot (2012) in
TV game show settings. Second, attractiveness bias is independent from age, race, and
occupation. This is mostly in line with recent findings by Marlow, Schneider, and Nelson
(1996). Lastly, regional allocation has weak effects on attractiveness discrimination. This
implies that attractiveness bias is, to a certain degree, ingrained in a country’s culture and
highlights the need for additional research into this area.
Given the highly stylized nature of the interactions on this television show, one must
use extraordinary caution in trying to draw general conclusions from these results. How-
ever, due to the subconscious nature of cognitive biases, some general recommendations
and implications for HR managers can be formulated. These include, but are not limited
to: an implementation of a system of checks and balances and code of conduct; the neu-
tralization of the selection process; the education of employees about cognitive biases; the
usage of quantifiable performance control measures as well as promotion and compensation
tied to objective goals and milestones. An unbiased, efficient process based on merit and
accomplishments should be the logical consequence of such measures.

46
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