How is Ku Klux Klan like a group

of Real-Estate Agents?
A case presentation by:
Group 16.
Contents
• Ku Klux Klan (Demin Lal Kakshapati)
• Stetson Kennedy (Anamika Shakya )
• Term-Life Insurance (Anupiya Kansakar)
• Real-Estate Agent (Praptee Shree)
• Weakest Link (Bipsana Prasai)
• Dating Sites (Rahul Raj Dali)
• Analysis and Conclusion (Sakar Tripathi)
Ku Klux Klan
• A hate group (specially towards African-Americans)
• Was originally organized by Confederate veterans
• In Pulaski, Tennessee, in 1865-66
• Derived the name from the Greek word ’kyklos’,
from which comes the English “circle”
• Was started as Christian, Patriotic organization,
turned out to be a White Supremacist Group
• Has 3 generations of Klan; 1st (1865-71), 2nd (1915-
1944), 3rd (1946-present)
Appearance
• Draped white bedsheets
and pillowheads in
earlier period of the
organization’s formation
• A floor-length, solid-
white robe (often
decorated with a round
badge bearing an
insignia with a cross)
• A white, sharply pointed
hat that includes a full-
faced cloth mask with
eyeholes.

Appearance of a 1st gen Ku Appearance of 2nd gen

Klux Klan member Ku Klux Klan member
1st Klan
1866-71
• Formation of Ku Klux Klan
• Publishes its “Organizations and
Principles” (provided on the
right)
• Targeted African-Americans, and
anyone who supported black
voting, education or other rights
• Klan Act passed in 1871,
allowing federal government to
intervene and arrest the Klan
members on a large scale
• Even though arrested, Klan
served its original purpose
• Are you opposed to Negro equality both
social and political?
• Are you in favor of a white man's
government in this country?
• Are you in favor of constitutional
liberty, and a government of equitable
laws instead of a government of
violence and oppression?
• Are you in favor of maintaining the
constitutional rights of the South?
• Are you in favor of the re
enfranchisement and emancipation of
the white men of the South, and the
restitution of the Southern people to all
their rights, alike proprietary, civil, and
political?
• Do you believe in the inalienable right
of self-preservation of the people
against the exercise of arbitrary and
unlicensed power?
2nd Klan
1915-44
• Revival of Ku Klux Klan, after the film “ Birth of the
Nation”
• Led by William Joseph Simmons
• The membership is said to peaked at 8 million in
1920-25
• Anti-African, Anti-Catholic, Anti-Immigration
• Lynching of Blacks
• Strong Argument for White Supremacy
How did the Klan function?
• Had Klan customs, for e.g.; add a Kl to many words. (Thus
would two Klansmen hold a Klonversation in the local
Klavern.)
• Secret handshake; left-handed, limp-wristed fish wiggle
• Secret codes; Mr. Ayak and Mr. Akai
• Revenue generated from:
i. Selling Costumes
ii. Dues paying ranked and filed members
iii. Protection money
iv. Donations in huge rallies
v. Death Benefit Association; sold insurance policies to
Klansmen
Stetson Kennedy
• William Stetson Kennedy, an American author,
folklorist, and human right activist

• Born on October 5, 1916

• Well known for infiltrating the Ku Klux Klan in

Stetson Kennedy
1940s

• Atlanta- the Imperial City of the KKK’s Invisible

Empire was home town of Kennedy
 Why Kennedy was strongly
against the Klan?
• Violent

• The Klan basically was a money making operation

• Not a non profit and non- political organization

 How did Kennedy exposed the
Klan?
• Kennedy joined the multiple Klan-affiliated organizations

under the pseudonym John Perkins

• Interviewed many Klan leaders and sympathizers

• The Klan Unmasked Book, included the eyewitness

records of the Klan activities and its secret information

• John Brown ,one of the eye witness of the Klan

activities

• Use of different secret codes in Klan like Mr. Ayak and

Mr.Akai
• Kennedy used the mass media i.e. radio

• Provided the Klan reports to the journalist Drew Pearson and the
producer of the Adventure of Superman

• Broadcasted the plans of Klan

What were the consequences?
• Attendance at the Klan meeting began to fall

• Klan private information turned into public

• Americans actively opposed the Klan

• Downfall of the Klan

• Kennedy understood the raw power of information

Term Life Insurance
• Term life insurance or term assurance is life insurance that
provides coverage at a fixed rate of payments for a limited
period of time.
Term life insurance case
• In the late 1990s, the price of term life insurance fell
dramatically

• Other types of insurance, including health and automobile and

homeowners’ coverage were not falling in price

• Any given thirty-year, guaranteed policy for $1 million is

essentially identical to the next

• Suddenly customers were paying $1 billion less a year for

term life insurance
The Internet
• In 1996, several websites like Quotesmith.com compared prices of insurances of
different companies

• A process which was time consuming was made easy

• Expensive companies had to lower their price

• Like Kennedy, they were dealing in information

• The Klan trafficked in secret information

• Insurance prices were less a secret

• the dissemination of the information diluted its power

Information asymmetry
• Information asymmetry refers to the case where one party has
more than the other during a transaction
• Information is the currency of internet
• Vastly shrunk the gap between the experts and the public
Real-Estate Agents
What do real-estate agents do?
• Act as middlemen

• Licensed to help sellers sell and buyers buy real estate

• Usually work completely on commission

• Look for personal incentives

How realtors work?
• Two pressing fears when you sell your house

• Exercise every advantage of information asymmetry

• Tend to manipulate numbers and information

• Clever use of words in the for-sale ads they write

 1. Granite
2. State-of-the-art
3. Corian
4. Maple
5. Gourmet
6. Fantastic
7. Spacious
8. !
9. Charming
10. Great neighbourhood
Similarities
• Importance of inside information

• Use their in formation advantage to serve their own agenda

• Both derive their power from their knowledge

• Highly affected by leaks of information

 Weakest link
• The Television game show
• Unique laboratory to study
discrimination
• An import from united kingdom
• Later became wildly popular in the
united states.
 How is the game played?
• Includes 6-8 contestants
• Each answer trivia questions
• Each contestant vote to eliminate one other
contestant
• Jackpot increases with correct answer
• Discriminatory favoritism seems to be at play.
 How are contestant eliminated?
• Early rounds: Bad players are eliminated
• Later rounds: Good players are eliminated
• In early rounds, player’s incentives are to build a
better jackpot
• In later rounds, value of building jackpot is
outweighed to win jackpot.
 Discrimination
• Seen against Latinos and Elderly contestants
• People don’t want to appear biased in front of
camera.
Types of discrimination
• Taste-based discrimination
• Information-based discrimination
 Taste-based discrimination
• Based on certain groups
• Elderly players are victims
• Eliminated in both early and later rounds.
Information-based discrimination
• Based on perception of people
• Latinos are the victims
• Eliminated in early rounds only.
Dating Sites : Source for Information Abuse
What happens in Dating Sites ?
• Swapping

• Common Way Of Working

• Two Layers of Data is Mined

• 1.The Information

• 2.The Response
Further Study on Information and
response
• Two economists and a psychologist:1)Günter J. Hitsch 2)Ali
Hortaçsu 3)Dan Ariely

• Predominantly White

• Over Emphasis on Above Average(Users)

• Role of Photograph
Preferences And Discrimination In
dating Sites
• Stereotypical Preferences

• Racial Discrimination
• 1.At first Race didn’t matter
• 2.Response tells different story
Is selling Your house similar to Online
Dating?
Reasons And Similarities
• Know Your Goals

• Understand Your Competition

• The More Detail, The Better

 Summary ;

• Aftermath the Civil War initiated by 6 men doing

harmless midnight pranks
• Later become multi-state terrorist group which
targeted emancipated slaves
• Within a decade, this group faded away
• Revived in 1920s, and started targeting not only
blacks but also Catholics, Jews, communists,
immigrants, and other minority groups.
 Summary contd. ;
• KKK remained low profiled for the
duration of World War II
• Revitalized strongly after the war having
it’s headquarters in Atlanta
• Stetson Kennedy who wanted to end
bigotry joined the Klan to reveal its secret
and destroy it
• He moved up the ranks, collecting
information and joined Klavaliers
Summary contd. ;
• In the 1940s the Klan became very
less violent and conducted less
lynching but were very powerful due
to their fear rhetoric
• Kennedy realized he had to expose
the Klan, so he fed all these
information to news and most
importantly children radio show
“Adventures of Superman”
Summary contd. ;
• Once all their secrets were made public, the Klan
became something that was mocked at and
membership fell drastically
• Kennedy understood the power of information, and
realized information when disclosed would destroy
the advantage the Klan had when they held it

Possessed Information = Power

 Summary contd. ;
• With the advent of Internet, the term
life insurance prices fell drastically
• People could compare different
policies and choose which led the
possession of information to be
balanced
• Still many experts can use incentives
like fear to rope customers into a bad
deal
Summary contd. ;
• Our houses are just marks for
real estate agents and they try to
sell it as soon as they can, also
they will convince you that a
low offer is actually worth
taking
• Agents will use informational
advantage to induce fear in you
Summary contd. ;
• Agents will use various ambiguous words to
describe bad housing but are very specific when
describing good housing
• Not only experts but we also manipulate information
to let the world perceive the thing we want them to
think abut us
Summary contd. ;

• Weakest Link shows how people may not be

outwardly discriminatory but those are just a charade
and people are quite discriminative when the
incentives are high
• People assumed a person to be highly
knowledgeable or a fool just on the basis of their
race, age and gender
Summary contd. ;
• People can be seen to
discriminate in online dating
sites as they choose other
people of their own race
although they mention that
race would not be a problem
for them
Analysis
Analysis Contd. ;
The writers discuss about the actions of a severely
racist and terrorizing group KKK keeping their moral
judgements aside but with a economic perspective.
They subtly ask insensitive and offensive question like:

Why didn’t KKK kill

more black people?
 Because even when they killed few people they could
spread false information around and people would fear
them and black would be subservient
Analysis Contd. ;
Stetson realized information asymmetry existed
between people and KKK and he then disseminated the
secret to balance the information on both sides
destroying the fear spread by KKK
Analysis Contd. ;
The writers have mentioned how after the Internet, the
information asymmetry has been greatly reduced.
Still corporate houses could keep their secrets to
themselves. Due to this some companies manipulated
data about them to appear better in the eyes of an
investor causing scandals like ENRON and
WORLDCOM.
Analysis Contd. ;
Real estate agents are similar to KKK because they use
special selective information to induce fear in people
and get their job done.
They also use their secret language to describe houses.

=
Analysis Contd. ;
People tend to behave differently in situations with high
incentives.
Information asymmetry is a phenomena everyone uses.
We try to display untrue facts about us to make us look
better.
 How is this related to Economics?
Distances idealized economic principles from the real
world.
Supply and demand principle requires both parties to
have equal information but does not happen.
Leads the market to have inefficient market outcome.
Concluding…
References
• https://www.litcharts.com/
• https://www.thoughtco.com/the-ku-klux-klan-history
-721444
• https://www.gradesaver.com/
• https://www.britannica.com/
• http://freakonomics.com/
• https://en.wikipedia.org
• https://www.coursehero.com