Your Daily Awesome

For example, Ayres points out that McDonald’s can’t charge Hispanics more for hamburgers than white people—even if they thought that Hispanics would be willing to pay more for hamburgers—because a Hispanic standing in line behind a white person would quickly discover what was going on. Transparency is the great antidote to discriminatory behavior. So is competition. This was Gary Becker’s argument. If a fast food restaurant tries to over-charge Hispanics, then another restaurant can open next door, and make a lot of money treating Hispanics properly. Once again, knowledge about an offending behavior has the effect of correcting the wrong.

But are there cases, Ayres wondered, where there isn’t enough transparency and competition to correct discrimination? If I don’t know I’m being treated differently, for instance, I have no incentive to take my business elsewhere.

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