What's in a Face?An Experiment on Facial Information and Loan Approval Decision
2021
Face-to-face communication is essential in daily life but relatively little is known about whether seeing a face improves people’s decision quality. This experimental paper studies the loan approval decisions based on the historical cash loan data with real repayment outcomes, and exogenously varies whether and how a borrower’s facial information is provided. We find that facial information does not improve subjects’ decisions, despite the fact that it can predict repayment behavior in a machine learning algorithm. This is because subjects have various biases in evaluating facial photos; and they rely excessively on facial information in making the loan approval decisions.
- Correction
- Source
- Cite
- Save
- Machine Reading By IdeaReader
0
References
0
Citations
NaN
KQI