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Don't Demotivate, Discriminate

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  • Jurjen J. A. Kamphorst
  • Otto H. Swank

Abstract

This paper offers a new theory of discrimination in the workplace. We consider a manager who has to assign two tasks to two employees. The manager has superior information about the employees' abilities. We show that besides an equilibrium where the manager does not discriminate, equilibria exist where the manager discriminates in favor of the employee whom the employees expect to be favored. The manager, who has no taste for discrimination, discriminates in order to avoid demotivating the "favorite". We show that the nondiscriminatory equilibrium is unstable. Yet the manager would prefer to commit not to discriminate. (JEL D82, D84, J71, M12, M51, M54)

Suggested Citation

  • Jurjen J. A. Kamphorst & Otto H. Swank, 2016. "Don't Demotivate, Discriminate," American Economic Journal: Microeconomics, American Economic Association, vol. 8(1), pages 140-165, February.
    • Handle: RePEc:aea:aejmic:v:8:y:2016:i:1:p:140-65
    Note: DOI: 10.1257/mic.20140204
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    Citations

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    Cited by:

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    2. Eriksson, Tor & Smith, Nina & Smith, Valdemar, 2017. "Gender Stereotyping and Self-Stereotyping Attitudes: A Large Field Study of Managers," IZA Discussion Papers 10932, Institute of Labor Economics (IZA).
    3. Sémirat, S., 2015. "Complementarity exacerbates discrimination," Working Papers 2015-12, Grenoble Applied Economics Laboratory (GAEL).
    4. Fabio Berton & Stefano Dughera & Andrea Ricci, 2019. "Unions and Firms' Investments. A Unified View," LABORatorio R. Revelli Working Papers Series 168, LABORatorio R. Revelli, Centre for Employment Studies.
    5. Dewan, Torun & Wolton, Stephane, 2019. "A Political Economy of Social Discrimination," MPRA Paper 94394, University Library of Munich, Germany.
    6. Anja Prummer, "undated". "Discrimination in Promotion," Working Papers 905, Queen Mary University of London, School of Economics and Finance.
    7. Lagerlöf, Johan N.M., 2020. "Strategic gains from discrimination," European Economic Review, Elsevier, vol. 122(C).
    8. Sémirat, Stéphan, 2019. "Skewed information transmission: The effect of complementarities in a multi-dimensional cheap talk game," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 1-19.
    9. Stéphan Sémirat, 2019. "Strategic information transmission despite conflict," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(3), pages 921-956, September.

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    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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