Costly exploration produces stereotypes with dimensions of warmth and competence.

Traditional explanations for stereotypes assume that they result from deficits in humans (ingroup-favoring motives, cognitive biases) or their environments (majority advantages, real group differences). An alternative explanation recently proposed that stereotypes can emerge when exploration is costly. Even optimal decision makers in an ideal environment can inadvertently form incorrect impressions from arbitrary encounters. However, all these existing theories essentially describe shortcuts that fail to explain the multidimensionality of stereotypes. Stereotypes of social groups have a canonical multidimensional structure, organized along dimensions of warmth and competence. We show that these dimensions and the associated stereotypes can result from feature-based exploration: When individuals make self-interested decisions based on past experiences in an environment where exploring new options carries an implicit cost and when these options share similar attributes, they are more likely to separate groups along multiple dimensions. We formalize this theory via the contextual multiarmed bandit problem, use the resulting model to generate testable predictions, and evaluate those predictions against human behavior. We evaluate this process in incentivized decisions involving as many as 20 real jobs and successfully recover the classic dimensions of warmth and competence. Further experiments show that intervening on the cost of exploration effectively mitigates bias, further demonstrating that exploration cost per se is the operating variable. Future diversity interventions may consider how to reduce exploration cost, in ways that parallel our manipulations. (PsycInfo Database Record (c) 2024 APA, all rights reserved).