Social Perception and Affirmative Action: A Game-Theoretic Analysis

Abstract

We consider a signaling game where White students and Black students compete for college admissions. All students have psychic costs that vary with their intrinsic ability and the level of performance. But Black students in addition face a cultural or psychological cost which varies with performance. Two interpretations are given for this cost: 'acting white' and/or stereotype threat, both of which have been well-documented in the sociology literature. Given this extra signaling cost particular to Black students, I show that a positive measure of affirmative action necessarily outperforms color-blind admission policies not only for diversity but also for quality.

Keywords: game theory, signaling game, affirmative action, social perception, economic sociology, education, games of imperfect information

JEL Classification: C7, D63, D8, I2, J1, J7