IDEAS home Printed from https://ideas.repec.org/p/bfi/wpaper/2012-005.html
   My bibliography  Save this paper

Spontaneous Discrimination

Author

Listed:
  • Balazs Szentes

    (London School of Economics)

  • Marcin PÄ™ski

    (University of Toronto)

Abstract

This paper considers a dynamic economy in which agents are repeatedly matched with one another and decide whether to enter into profitable partnerships. Each agent has a physical colour and a social colour. The social colour of an agent acts as a signal about the physical colour of agents in his partnership history. Before an agent makes a decision, he observes his match's physical and social colours. Neither the physical colour nor the social colour is payoff-relevant. We identify environments where, in some equilibria, agents condition their decisions on the physical and social colours of their potential partners. That is, they discriminate. The main result of the paper is that, in these aforementioned environments, every stable equilibrium must involve discrimination. In particular, the colour-blind equilibrium is unstable.

Suggested Citation

  • Balazs Szentes & Marcin PÄ™ski, 2012. "Spontaneous Discrimination," Working Papers 2012-005, Becker Friedman Institute for Research In Economics.
  • Handle: RePEc:bfi:wpaper:2012-005
    as

    Download full text from publisher

    File URL: https://econresearch.uchicago.edu/sites/econresearch.uchicago.edu/files/BFI_2012-005.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    2. Mariagiovanna Baccara & Leeat Yariv, 2008. "Similarity and Polarization in Groups," Working Papers 08-27, New York University, Leonard N. Stern School of Business, Department of Economics.
    3. Rosen, Asa, 1997. "An equilibrium search-matching model of discrimination," European Economic Review, Elsevier, vol. 41(8), pages 1589-1613, August.
    4. David Austen-Smith & Roland G. Fryer, 2005. "An Economic Analysis of "Acting White"," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 551-583.
    5. Hanming Fang & Andrea Moro, 2010. "Theories of Statistical Discrimination and Affirmative Action: A Survey," NBER Working Papers 15860, National Bureau of Economic Research, Inc.
    6. David Austen-Smith & Ronald G. Fryer, 2005. "An Economic Analysis of 'Acting White'," Discussion Papers 1399, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    7. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, April.
    8. Michihiro Kandori, 1992. "Social Norms and Community Enforcement," Review of Economic Studies, Oxford University Press, vol. 59(1), pages 63-80.
    9. Drew Fudenberg & David K. Levine, 1998. "The Theory of Learning in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061945, January.
    10. Jan Eeckhout, 2006. "Minorities and Endogenous Segregation," Review of Economic Studies, Oxford University Press, vol. 73(1), pages 31-53.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    racial discrimination; stable equilibria;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bfi:wpaper:2012-005. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Toni Shears). General contact details of provider: http://edirc.repec.org/data/mfichus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.