Does Affirmative Action Reduce Effort Incentives? A Contest Game Analysis
AbstractIn this paper a contest game with heterogeneous players is analyzed in which heterogeneity could be the consequence of past discrimination. Based on the normative perception of the heterogeneity there are two policy options to tackle this heterogeneity: either it is ignored and the contestants are treated equally, or affirmative action is implemented which compensates discriminated players. The consequences of these two policy options are analyzed for a simple two-person contest game and it is shown that the frequently criticized trade-off between affirmative action and total effort does not exist: Instead, affirmative action fosters effort incentives. A generalization to the n-person case and to a case with a partially informed contest designer yields the same result if the participation level is similar under each policy.
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Bibliographic InfoPaper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 711.07.
Date of creation: 31 Jul 2007
Date of revision:
Asymmetric contest; affirmative action; discrimination;
Other versions of this item:
- Jörg Franke, 2010. "Does Affirmative Action Reduce Effort Incentives? – A Contest Game Analysis," Ruhr Economic Papers 0185, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-09 (All new papers)
- NEP-DCM-2007-09-09 (Discrete Choice Models)
- NEP-GTH-2007-09-09 (Game Theory)
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