On discrimination with competition between groups

Research output: Contribution to journalArticle

Abstract

Statistical discrimination explains that two ex ante identical groups can have two different qualifications due to asymmetric information and self-fulfilling equilibria. In the typical statistical discrimination models, however, there is no interaction between groups. This paper offers a statistical discrimination model with a continuous signaling in which two groups compete for employment. We compare exclusive equilibria, in which no worker in one group makes a human capital investment, with symmetric equilibria, and show that discrimination as well as non-discrimination can be Pareto optimal under a certain environment.

Original languageEnglish
Pages (from-to)1-12
Number of pages12
JournalJournal of Economic Theory and Econometrics
Volume30
Issue number4
Publication statusPublished - 2019 Dec

Keywords

  • Asymmetric information
  • Group inequality
  • Statistical discrimination

ASJC Scopus subject areas

  • Economics and Econometrics

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