Ethnic discrimination and signals of trustworthiness in an online market: Evidence from two field experiments

Results from two field experiments which were designed to identify possible ethnic discrimination on a German internet auction platform are discussed. A first set of results is produced by a secondary analysis of an earlier experiment. The second experiment additionally tests whether costly signals can help to overcome trust problems between buyers and sellers in online markets. The evidence is rather mixed with respect to ethnic discrimination, and it does not support the signaling hypothesis.