Mayerhoffer, DanielDanielMayerhoffer0000-0001-8841-407XSchulz, JanJanSchulz0000-0001-7745-39972022-05-302022-05-3020222364-8228https://fis.uni-bamberg.de/handle/uniba/54122Inequality perceptions differ along racial and gendered lines. To explain these disparities, we propose an agent-based model of localised perceptions of the gender and racial wage gap in networks. We show that the combination of homophilic graph formation and estimation based on locally limited knowledge can replicate both the underestimation of the gender or racial wage gap that empirical studies find and the well-documented fact that the underprivileged perceive the wage gap to be higher on average and with less bias. Similarly, we demonstrate that the underprivileged perceive overall inequality to be higher on average. In contrast to this qualitative replication, we also show that the effect of homophilic graph formation is quantitatively too strong to account for the empirically observed effect sizes within a recent Israeli sample on perceived gender wage gaps. As a parsimonious extension, we let agents estimate using a composite signal based on local and global information. Our calibration suggests that women place much more weight on the (correct) global signal than men, in line with psychological evidence that people adversely affected by group-based inequities pay more attention to global information about the issue. Our findings suggest that (educational) interventions about the global state of gender equality are much more likely to succeed than information treatments about overall inequality and that these interventions should target the privileged.deuInequalityHomophilyDisassortativityDiversityGenderRaceWage gapAgent-based model300article10.1007/s41109-022-00467-x