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Prejudice and Competitive Signaling


  • Sue H. Mialon


In a signaling game between a receiver and senders, prejudice occurs if senders are prejudged based on an index such as race without reference to their qualifying signals. This paper investigates what makes the receiver ignore senders' informative signals in favor of the uninformative index. Prejudice arises when competition between senders erodes their signaling incentive and reduces the quality of signaling significantly. To minimize the decrease in quality, the receiver may prescreen the senders using the index, removing the impact of competition. We advocate policies that enhance the quality of signals to ensure the effectiveness of competitive signaling systems.

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  • Sue H. Mialon, 2013. "Prejudice and Competitive Signaling," Emory Economics 1313, Department of Economics, Emory University (Atlanta).
  • Handle: RePEc:emo:wp2003:1313

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    References listed on IDEAS

    1. Lawrence E. Blume, 2005. "Learning and Statistical Discrimination," American Economic Review, American Economic Association, vol. 95(2), pages 118-121, May.
    2. Eeckhoudt, Louis & Gollier, Christian, 1995. "Demand for Risky Assets and the Monotone Probability Ratio Order," Journal of Risk and Uncertainty, Springer, vol. 11(2), pages 113-122, September.
    3. Moro, Andrea & Norman, Peter, 2004. "A general equilibrium model of statistical discrimination," Journal of Economic Theory, Elsevier, vol. 114(1), pages 1-30, January.
    4. Larry Samuelson & George J. Mailath & Avner Shaked, 2000. "Endogenous Inequality in Integrated Labor Markets with Two-Sided Search," American Economic Review, American Economic Association, vol. 90(1), pages 46-72, March.
    5. Klumpp, Tilman & Su, Xuejuan, 2013. "Second-order statistical discrimination," Journal of Public Economics, Elsevier, vol. 97(C), pages 108-116.
    6. Roland Fryer & Glenn C. Loury & Tolga Yuret, 2003. "Color-Blind Affirmative Action," NBER Working Papers 10103, National Bureau of Economic Research, Inc.
    7. Qiang Fu, 2006. "A Theory of Affirmative Action in College Admissions," Economic Inquiry, Western Economic Association International, vol. 44(3), pages 420-428, July.
    8. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    9. Sue H. Mialon & Seung Han Yoo, 2014. "Employers' Preference for Discrimination," Emory Economics 1402, Department of Economics, Emory University (Atlanta).
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    Cited by:

    1. Sue H. Mialon & Seung Han Yoo, 2014. "Employers' Preference for Discrimination," Emory Economics 1402, Department of Economics, Emory University (Atlanta).

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