Evaluation System and Cognitive Bias in Meiji, Japan

―Empirical Study of the Halo Effect Using a List of Foreign Nationals Employed in Japan―

Abstract

This study demonstrates the impact of the halo effect on renewing contract of Foreign Employees in Meiji, Japan (“Oyatoi-gaikokujin"). The halo effect is the tendency of existing evaluations to influence subsequent ones. We used financial data from 1874 to 1876, and the directory. The results reveal that due to the halo effect, high education and past performance earn higher pay, but result in less than expected outcomes; meanwhile, those with lower expectations are more likely to be rehired. This study contributes to the theory of cognitive bias by demonstrating the halo effect, which is difficult to quantify and made a cross-disciplinary contribution to the field of Japanese history.