Two friends walk into a flea market, both looking for vintage leather jackets. One of the friends is what the average person would consider attractive. The other is not. Their relative attractiveness can play a role in each person getting a great price, suggests research from Chicago Booth PhD student Xilin Li and Booth’s Christopher K. Hsee. They find that successful negotiations with a vendor can depend on who approaches first: generally, it should be the attractive person.
Li and Hsee studied the relationship between approach order and vendor discrimination on consumer welfare. They documented a positive and corresponding negative effect depending on whether the vendor first encountered an advantaged person—in this case, the attractive friend at the flea market—or a less advantaged one, i.e., the less attractive friend.
Of course, the potential benefits and costs aren’t limited to leather jackets, and the advantage isn’t limited to attractiveness. A person might gain an upper hand by possessing valued traits related to sex, gender, race, or another factor.
A host of past research on discrimination finds that individuals, be they jacket vendors, other sellers, or hiring managers, tend to favor those who are advantaged—but also that people want their choices to be justifiable and consistent.
Li and Hsee predicted that the order in which vendors interact with people could affect their treatment. Perhaps, not wanting to seem discriminatory, either to themselves or others, vendors might give the second person who approached them the same deal as the first. If you’re that vendor selling leather jackets at a flea market and an unattractive person haggles the price of a jacket soon after an attractive person, your wish to make consistent and justifiable decisions might mean you give them a lower price than you might have had the attractive person not approached you first. But if the unattractive person haggles first, you might charge the attractive person more than you otherwise might have, Li and Hsee conjectured.
They conducted a field experiment at a large open market where prices were negotiable. Two women who were in on the study (but not told about its purpose) approached 62 vendors over two days. As the researchers expected, the less attractive woman (as measured by a pretest) received significantly worse prices when she was the first to approach the vendors and better prices when she was the second to approach. The more attractive woman, however, got worse prices when she was the second to approach the vendor.
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The researchers replicated these results in a study in which ethnicity was the factor at work. Research participants, a group of online survey takers in the United States, were told to imagine that they had a basement apartment for lease and could rent it on a sliding scale from roughly $400 to $1,000 per month. When they were faced with a scenario in which a man from Saudi Arabia approached them first, the participants offered him worse prices than when a man from Canada arrived first. The Canadian man also received worse prices in this situation.
This effect dwindled when the participants felt justified in making a decision on the basis of an alternative characteristic, namely a propensity to make noise. Participants prompted to imagine that they were sensitive to noise felt justified in asking more money from a man who admitted to regular late-night phone conversations than from one who didn’t, regardless of which man approached first.
Overall, the researchers write, both people in line likely come out better when the advantaged person is evaluated first. When both people are evaluated simultaneously, as would happen if the two leather-jacket seeking friends shopped together, the researchers say more study is needed to determine whether the vendor will treat them both well, both badly, or a mixture of the two in an effort to not seem discriminatory.
What does this mean for the friends or for, say, two colleagues who are up for performance reviews? If they recognize that one person may be treated better than the other, the advantaged person should go first. That way, they might both get the best deal.
Xilin Li and Christopher K. Hsee, “Free-Riding and Cost-Bearing in Discrimination,” Organizational Behavior and Human Decision Processes, March 2021.
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