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Don't demotivate, discriminate

Listed author(s):
  • Jurjen J.A. Kamphorst

    (Erasmus University Rotterdam)

  • Otto H. Swank

    (Erasmus University Rotterdam)

This discussion paper led to a publication in the American Economic Journal: Microeconomics . 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 non-discriminatory equilibrium is unstable. Yet the manager would prefer to commit not to discriminate.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 14-017/VII.

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Date of creation: 31 Jan 2014
Handle: RePEc:tin:wpaper:20140017
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  11. Junichiro Ishida, 2006. "Optimal Promotion Policies with the Looking-Glass Effect," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 857-878, October.
  12. Lazear, Edward P & Rosen, Sherwin, 1990. "Male-Female Wage Differentials in Job Ladders," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 106-123, January.
  13. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
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  15. 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.
  16. Marcin P?ski & Bal?zs Szentes, 2013. "Spontaneous Discrimination," American Economic Review, American Economic Association, vol. 103(6), pages 2412-2436, October.
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