What's in a Face? An Experiment on Facial Information and Loan-Approval Decision

• 成果类型: Article
• 署名作者: Chen, Zeyang; Liu, Yu-Jane; Meng, Juanjuan; Wang, Zeng
• 署名单位: Renmin University of China; Peking University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.4436
• 发表日期: 2023
• 页码: 2263-2283
• 关键词: facial information; cash loan; repayment behavior; Machine Learning

摘要

Facial information 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 inmaking the loan-approval decisions.