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Discrimination as a coordination device : markets and the emergence of identity

Listed author(s):
  • Basu,Kaushik

The paper develops a new theory of group discrimination in which the discrimination in favor or against certain groups is simply a coordination device. It is built on the axiom that a person who gets to perform many tasks is more effective in carrying out each task, which implies increasing returns to productivity in doing the same task or strategic complementarity between doing different tasks. The theory helps us understand discrimination in free markets and the .finding of some empirical studies that show that people discriminate in job markets against certain groups even when all other traits are held constant. The model gives insight into the relation between group size, discrimination, and productivity.

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File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/11/13/090224b0831b64ea/1_0/Rendered/PDF/Discrimination0mergence0of0identity.pdf
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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 7490.

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Date of creation: 13 Nov 2015
Handle: RePEc:wbk:wbrwps:7490
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  1. Basu, K. & Weibull, J.W., 1990. "Strategy Subsets Closed Under Rational Behaviour," Papers 479, Stockholm - International Economic Studies.
  2. Ashwini Deshpande & Smriti Sharma, 2014. "Disadvantage And Discrimination In Self-Employment - Caste Gaps In Earnings In Indian Small Businesses," Working papers 236, Centre for Development Economics, Delhi School of Economics.
  3. Deshpande, Ashwini & Weisskopf, Thomas E., 2014. "Does Affirmative Action Reduce Productivity? A Case Study of the Indian Railways," World Development, Elsevier, vol. 64(C), pages 169-180.
  4. Marianne Bertrand & Sendhil Mullainathan, 2004. "Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination," American Economic Review, American Economic Association, vol. 94(4), pages 991-1013, September.
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