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Affirmative action in winner-take-all markets

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Abstract

Whom to hire, promote, admit into elite universities, elect, or issue government contracts to are all determined in a tournament-like (winner-take-all) structure. This paper constructs a simple model of pair-wise tournament competition to investigate affirmative action in these markets. We consider two forms of affirmative action: group-sighted, where employers are allowed to use group identity in pursuit of their diversity goals; and group-blind, where they are not. It is shown that the equilibrium group-sighted affirmative action scheme involves a constant handicap given to agents in the disadvantaged group. Equilibrium group-blind affirmative action creates a unique semi-separating equilibrium in which a large pool of contestants exerts zero effort, and this pool is increasing in the aggresiveness of the affirmative action mandate.

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Authors and Affiliations

  1. Harvard University Society of Fellows and NBER, 1875 Cambridge Street, Cambridge, MA, 02138, USA

    Roland G. Fryer Jr

  2. Department of Economics, Boston University, 270 Bay State Road, Boston, MA, 02215, USA

    Glenn C. Loury

Authors
  1. Roland G. Fryer Jr
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  2. Glenn C. Loury
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Correspondence to Roland G. Fryer Jr.

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Fryer, R.G., Loury, G.C. Affirmative action in winner-take-all markets. J Econ Inequal 3, 263–280 (2005). https://doi.org/10.1007/s10888-005-9000-x

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  • DOI: https://doi.org/10.1007/s10888-005-9000-x

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