Do looks matter in supply chain contracting? An experimental study

Abstract

We present results of an experiment designed to reveal the “face effect” on pricing behavior in a supply chain game. In particular, we study the variation in wholesale prices driven by subjective judgments of three facial traits—attractiveness, trustworthiness, and dominance—of a retailer’s face and own appearance. Our experimental data suggest that the distributions of decisions in settings whether individuals see, or not see, retailers’ faces are not equivalent. Furthermore, we find the complex dependencies between decision behaviors and facial traits. Subjective evaluations of facial traits, both self-reported and others, have a significant effect on the selected decisions.