Costless Discrimination and Unequal Achievements in a Labour Market Experiment
AbstractWe investigate the emergence of discrimination in an experiment where individuals affiliated to different groups compete for a monetary prize, submitting independent bids to an auctioneer. The auctioneer receives perfect information about the bids (i.e. there is no statistical discrimination), and she has no monetary incentive to favour the members of her own group (the bidders are symmetric). We observe nonetheless some discrimination by auctioneers, who tend to assign the prize more frequently to a member of their own group when two or more players put forward the highest bid. Out-group bidders react to this bias and reduce significantly their bids, causing an average decay of their earnings throughout the game, with cumulative effects that generate strongly unequal outcomes. Because the initial bias is costless, such mechanism can survive even in competitive market, providing a rationale for a well-known puzzle in the literature, i.e. the long-run persistence of discrimination.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6187.
Length: 35 pages
Date of creation: Dec 2011
Date of revision:
Publication status: published in: Experimental Economics, 2013, 16(3), 285-305
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Other versions of this item:
- Antonio FILIPPIN & Francesco GUALA, 2011. "Costless discrimination and unequal achievements in a labour market experiment," Departmental Working Papers, Department of Economics, Management and Quantitative Methods at UniversitÃ degli Studi di Milano 2011-30, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-19 (All new papers)
- NEP-EXP-2011-12-19 (Experimental Economics)
- NEP-LMA-2011-12-19 (Labor Markets - Supply, Demand, & Wages)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Filippin, Antonio, 2003.
"Discrimination and Workers' Expectations,"
Royal Economic Society Annual Conference 2003, Royal Economic Society
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- Filippin, Antonio, 2009. "Can Workers' Expectations Account for the Persistence of Discrimination?," IZA Discussion Papers 4490, Institute for the Study of Labor (IZA).
- Hanming Fang & Andrea Moro, 2010. "Theories of Statistical Discrimination and Affirmative Action: A Survey," NBER Working Papers 15860, National Bureau of Economic Research, Inc.
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