POSITION PAPERS: MERCHANT BEHAVIOR IN THE GHETTO MARKETPLACE.

The article analyzes merchant behavior in ghetto marketplaces. For this purpose, the article presents two position papers taking different perspectives in regard to a possible explanation for the racial-ethnic differences found through previous research. Walter E. Williams, research economist with the Urban Institute, criticizes previous articles on the grounds that they fail to suggest a behavioral model of merchant behavior and because they fail to suggest effective policy measures to modify this behavior. Williams suggests a rational behavior model: that minorities are characterized by more unemployment, higher residential mobility, and lower income, and that merchants use this readily accessible information to determine creditworthiness. Frederick D. Sturdivant, Meshulam Riklis Professor of Business and Its Environment at the Ohio State University, suggests that the economic model employed by Williams is outdated and inappropriate, that the behavioral model encourages racist stereotyping.