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Does Affirmative Action Reduce Effort Incentives? – A Contest Game Analysis

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  • Jörg Franke

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Abstract

This paper analyzes the incentive effects of affirmative action in competitive environments modeled as contest games. Competition is between heterogeneous players where heterogeneity might be due to past discrimination. Two policy options are analyzed that tackle the underlying asymmetry: Either it is ignored and the contestants are treated equally, or affirmative action is implemented which compensates discriminated players. It is shown in a simple two-player contest game that a tradeoff between affirmative action and high effort exertion does not exist. Instead, the implementation of affirmative action fosters effort incentives. Similar results hold in the n-player contest as well as under imperfect information if the heterogeneity between contestants is moderate.

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File URL: http://repec.rwi-essen.de/files/REP_10_185.pdf
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Bibliographic Info

Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0185.

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Length: 31 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:rwi:repape:0185

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Keywords: Asymmetric contest; affirmative action; discrimination;

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Cited by:
  1. Caterina Calsamiglia & Jörg Franke & Pedro Rey-Biel, 2009. "The Incentive Effects of Affirmative Action in a Real-Effort Tournament," Working Papers 404, Barcelona Graduate School of Economics.

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