Social Inference and Occupational Choice: Type-Based Biases in a Bayesian Model of Class Formation

Beliefs are a key motivator of individual behavior. As such, an understanding of how individuals' beliefs develop is a prerequisite to understanding decision-making and behavior. While rational choice theory posits a Bayesian model framework for belief formation, sta- tus construction theories argue that beliefs are strongly in uenced by status typications. In this paper, we develop a Bayesian model of belief formation in which individuals use irrelevant information on others' observable type to bias their beliefs. This model is used to analyze a simple occupational choice setting, thereby shedding light on the micro-macro inter-relationship between observable type (e.g. race, gender) and social class.