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Complementarity exacerbates discrimination

Author

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  • Sémirat, S.

Abstract

We consider a manager who has to assign two tasks to two employees. We exhibit equilibria where the manager has an incentive to discriminate in favor of one of the employees. We show that the more complementary the tasks are, the more discriminatory the assignment is. We establish the efficiency of the discrimination considered, assuming enough complementarity between tasks. In support of empirical studies, we point out for instance the discrimination between immigrant and native workers, or the efficiency of seniority based promotion rules. Basically, the mechanism is that discrimination permits to withhold information, thereby reducing the difference of employees' perception of their ability.

Suggested Citation

  • Sémirat, S., 2015. "Complementarity exacerbates discrimination," Working Papers 2015-12, Grenoble Applied Economics Laboratory (GAEL).
  • Handle: RePEc:gbl:wpaper:2015-12
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    File URL: https://gael.univ-grenoble-alpes.fr/sites/gael/files/doc-recherche/WP/A2015/gael2015-12.pdf
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    References listed on IDEAS

    as
    1. John T. Addison & Orgul D.Ozturk & Si Wang, 2013. "Job Promotion in Mid-Career: Gender, Recession and ‘Crowding’," GEMF Working Papers 2013-16, GEMF, Faculty of Economics, University of Coimbra.
    2. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 705-746.
    3. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
    4. Benoît S. Y. Crutzen & Otto H. Swank & Bauke Visser, 2013. "Confidence Management: On Interpersonal Comparisons in Teams," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(4), pages 744-767, December.
    5. Moro, Andrea & Norman, Peter, 2004. "A general equilibrium model of statistical discrimination," Journal of Economic Theory, Elsevier, vol. 114(1), pages 1-30, January.
    6. 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.
    7. Finis Welch, 1967. "Labor-Market Discrimination: An Interpretation of Income Differences in the Rural South," Journal of Political Economy, University of Chicago Press, vol. 75, pages 225-225.
    8. Gianmarco I. P. Ottaviano & Giovanni Peri, 2016. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 2, pages 35-80 World Scientific Publishing Co. Pte. Ltd..
    9. Roland Bénabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," Review of Economic Studies, Oxford University Press, vol. 70(3), pages 489-520.
    10. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-1240, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    DISCRIMINATION; FACTOR SUBSTITUTION; CONFIDENCE MANAGEMENT; BAYESIAN GAMES;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • 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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