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Decentralized Affirmative Action Policies: Some Remarks on their Transparency and Persistence

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  • Philippe Jehiel

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Matthew V Leduc

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

Successive decentralized policy makers must decide whether to implement an affirmative action policy aimed at improving the performance distribution of future generations of a targeted group. Employers do not observe district by district whether workers benefited from affirmative action, but take into account that possibility when deciding on a wage. Workers thus receive wages corresponding to their expected performance and suffer a feeling of injustice when getting less than their actual performance. We find that welfare-maximizing policy makers choose to implement affirmative action perpetually, despite the resulting feeling of injustice that eventually dominates the anticipated benefits to the targeted group's performance. This contrasts with the first-best that requires affirmative action to be temporary.

Suggested Citation

  • Philippe Jehiel & Matthew V Leduc, 2023. "Decentralized Affirmative Action Policies: Some Remarks on their Transparency and Persistence," Working Papers halshs-03359602, HAL.
    • Handle: RePEc:hal:wpaper:halshs-03359602
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03359602v2
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    Keywords

    Affirmative Action; General Equilibrium; Loss Aversion; Prospect Theory; Moral Hazard; Game Theory;
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