lecture 6 diversity (2)

Question 1

Epistemic injustice in finance Boudewijn de bruin (2019)

Answer 1

focus on the market for consumer and small business loans

Disadvantaged groups experience statistical discrimination

Endogenous characteristics interpreted in a biased way

Question 2

Three claims (epistemic injustice)

Answer 2

Racial disparity is explained through testimonial injustice

Gender disparity is explained with epistemic self confidence

There is also untractable self fulfilling epistemic injustice

Question 3

Testimonial injustice (first claim) racial disparity is explained through testimonial injustice

Answer 3

Lending involves credibility of the lender

Racialized people are requested for further proof of their creditworthiness

Testimonial injustice can be a partial explanation for racial disparity on the supply side

What about the demand side?

Question 4

Epistemic self confidence (claim 2)

Answer 4

Injustice not only in how one is being treated, but in how one treats oneself as a knower

Epistemic self confidence is a precondition for successful epistemic action and … lowered epistemic self confidence regarding finance negatively affects financial decision making

Epistemic self confidence requires capacity and motivation to obtain knowledge and acquire skills which is missing on the demand side

Includes assessing who one trusts

Question 5

Self-fulfilling injustice (claim 3)

Answer 5

It is challenging to address injustice in the supply and demand sides due to self-fulfilling injustice

Cognitive biases seem to require an interventionist approach in financial markets (debiasing), as opposed to free-market approach

According to de bruin, neither approach is sufficient in the case of epistemic injustice

Debiasing may be profitable in racial disparity casees, but not in gender disparity cases

Market mechanism no reliable to reveal true beliefs

In fact, the market may evolve to confirm falses beliefs on creditworthiness, due to little incentive for members of disadvantages groups to contribute to the revision of these beliefs

Self fulfilling injustice shows that addressing gaps in demand and supply in financial markets is highly complex and dependent on wider social practices