Affirmative action through extra prizes

Dahm, Matthias; Esteve-González, Patricia

Abstract

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.

Citation

Dahm, M., & Esteve-González, P. (2018). Affirmative action through extra prizes. Journal of Economic Behavior and Organization, 153, 123-142. https://doi.org/10.1016/j.jebo.2018.06.016

• Journal Article Type: Article
• Acceptance Date: Jun 29, 2018
• Online Publication Date: Jul 28, 2018
• Publication Date: Sep 30, 2018
• Deposit Date: Jul 25, 2018
• Publicly Available Date: Jan 29, 2020
• Journal: Journal of Economic Behavior and Organization
• Electronic ISSN: 0167-2681
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 153
• Pages: 123-142
• DOI: https://doi.org/10.1016/j.jebo.2018.06.016
• Public URL: https://nottingham-repository.worktribe.com/output/942536