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Affirmative Action Through Endogenous Set-Asides

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  • Alcalde, José

    (IUDESP)

  • Dahm, Matthias

    (Department of Economics,)

Abstract

We study the effects of affirmative action through endogenous set-asides. We propose a share auction for dual sourcing in which more intensive affirmative action strengthens the favoured provider. This induces potentially more competitive procurement overall. Our main result considers a complete information setting and provides a condition under which affirmative action not only guarantees very substantial minority representation, but also reduces the buyer's provision cost compared to a first-price auction. We also consider extensions of the benchmark model, including to a setting in which providers have private information about their costs.

Suggested Citation

  • Alcalde, José & Dahm, Matthias, 2020. "Affirmative Action Through Endogenous Set-Asides," QM&ET Working Papers 20-1, University of Alicante, D. Quantitative Methods and Economic Theory.
    • Handle: RePEc:ris:qmetal:2020_001
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    Cited by:

    1. Subhasish M. Chowdhury & Patricia Esteve‐González & Anwesha Mukherjee, 2023. "Heterogeneity, leveling the playing field, and affirmative action in contests," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 924-974, January.

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    More about this item

    Keywords

    Affirmative Action; Bidding Credits; Bidding Preferences; Set-Asides;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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