Do Attractive People Get a Better Deal? An Experimental Study

The goal of our research is to shed light on the existence of an effect of seeing the images of human faces (i.e. "a face effect") on economic decision-making behavior. We conduct a series of controlled experiments using photographs of human faces in a newsvendor setting. Our experimental data provides evidence that the human face plays the role of an environmental moderator which triggers and intensifies the social considerations. To gain a deeper understanding of behavioral responses, we examined the impact of faces with varying characteristics, with a particular focus on the effects of facial attractiveness and perceived gender. We find that the decision-makers systematically deviate from their choices of wholesale prices when they imagine seeing the counterpart's face. To explain how facial attractiveness and gender affect the decision choices, we develop a behavioral model that incorporates altruistic and fairness concerns.