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Complementarity exacerbates discrimination

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  • Sémirat, S.

Abstract

We consider a manager who has to assign two tasks to two employees. We exhibit equilibria where the manager has an incentive to discriminate in favor of one of the employees. We show that the more complementary the tasks are, the more discriminatory the assignment is. We establish the efficiency of the discrimination considered, assuming enough complementarity between tasks. In support of empirical studies, we point out for instance the discrimination between immigrant and native workers, or the efficiency of seniority based promotion rules. Basically, the mechanism is that discrimination permits to withhold information, thereby reducing the difference of employees' perception of their ability.

Suggested Citation

  • Sémirat, S., 2015. "Complementarity exacerbates discrimination," Working Papers 2015-12, Grenoble Applied Economics Laboratory (GAEL).
    • Handle: RePEc:gbl:wpaper:2015-12
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    References listed on IDEAS

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    1. Gianmarco I. P. Ottaviano & Giovanni Peri, 2021. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 9, pages 245-290, World Scientific Publishing Co. Pte. Ltd..
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    More about this item

    Keywords

    DISCRIMINATION; FACTOR SUBSTITUTION; CONFIDENCE MANAGEMENT; BAYESIAN GAMES;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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