American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Don't Demotivate, Discriminate
American Economic Journal: Microeconomics
vol. 8,
no. 1, February 2016
(pp. 140–65)
Abstract
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 nondiscriminatory equilibrium is unstable. Yet the manager would prefer to commit not to discriminate. (JEL D82, D84, J71, M12, M51, M54)Citation
Kamphorst, Jurjen J. A., and Otto H. Swank. 2016. "Don't Demotivate, Discriminate." American Economic Journal: Microeconomics, 8 (1): 140–65. DOI: 10.1257/mic.20140204Additional Materials
JEL Classification
- D82 Asymmetric and Private Information; Mechanism Design
- D84 Expectations; Speculations
- J71 Labor Discrimination
- M12 Personnel Management; Executives; Executive Compensation
- M51 Personnel Economics: Firm Employment Decisions; Promotions
- M54 Personnel Economics: Labor Management
There are no comments for this article.
Login to Comment