Biases in low-information environments: Understanding for-profit and non-profit salary differentials in Haiti

Abstract

The Global South contains low-information environments that impose information search costs on organisations. We compare explanations for how employers make decisions in these environments. To do so, we analyse salaries collected from employers in Haiti, including local and international non-profits and domestic and foreign businesses. Although preliminary findings suggest that international non-governmental organisations pay above-market salaries, accounting for alternative explanations from behavioural economics causes the organisational form's importance to dissipate. We find that anchoring and framing mechanisms separately influence decision-making. These findings direct us to focus more on the actions and tools managers use to make decisions in low-information environments.