Employment or admission â€œgoalsâ€ are often preferred to affirmative action as a way of obtaining diversity. By constructing a simple model of employerâ€auditor interaction, I show that when an auditor has imperfect information regarding employersâ€™ proclivities to discriminate and the fraction of qualified minorities in each employerâ€™s applicant pool, goals are synonymous with quotas. Technically speaking, any equilibrium of the auditing game involves a nonempty set of employers who hire so that they do not trigger an audit by rejecting qualified nonminorities, hiring unqualified minorities, or both. Further, under some assumptions, explicit quotas (those mandated by an auditor) are more efficient than implicit quotas (goals settled on in equilibrium by employers wishing to avoid an audit).
|Date of creation:||2009|
|Date of revision:|
|Publication status:||Published in Journal of Legal Studies|
|Contact details of provider:|| Postal: Littauer Center, Cambridge, MA 02138|
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