Affirmative action through extra prizes

Dahm, Matthias and Esteve-González, Patricia (2018) Affirmative action through extra prizes. Journal of Economic Behavior and Organization . ISSN 0167-2681 (In Press)

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Some affirmative action policies establish that a set of disadvantaged competitors has access to an extra prize. We analyse the effects of creating an extra prize by reducing the prize in the main competition. Contestants differ in ability and agents with relatively low ability belong to a disadvantaged minority. All contestants compete for the main prize, but only disadvantaged agents can win the extra prize. We show that an extra prize is a powerful tool to ensure participation of disadvantaged agents. Moreover, for intermediate levels of the disadvantage of the minority, introducing an extra prize increases total equilibrium effort compared to a standard contest. Thus, even a contest designer not interested in affirmative action might establish an extra prize in order to enhance competition.

Item Type: Article
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > School of Economics
Depositing User: Dahm, Matthias
Date Deposited: 25 Jul 2018 08:33
Last Modified: 04 May 2020 19:42

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