Affirmative Action and Retaliation in Experimental Contests

23 Pages Posted: 17 Jul 2017

Date Written: June 30, 2017

Abstract

We conduct a real-effort experiment to test the effects of an affirmative action policy that reserves a share of the prize to subjects of a disadvantaged category in rent-seeking contests.

We test three potential pitfalls of the affirmative action policy:

(i) whether the introduction of the policy distorts effort and selection in the contest,

(ii) whether it leads to reverse discrimination and

(iii) whether the possibility of ex-post retaliatory actions undermines the effectiveness of the policy.

We find that the affirmative action contest increases entry of players from the disadvantaged category without affecting entry of advantaged players. However, we find that the possibility of retaliation can undermine the benefits of the affirmative action policy reducing contest participation. This suggests that retaliation is an important aspect to consider when implementing affirmative action policies.

Keywords: rent-seeking, contest design, affirmative action, retaliation

JEL Classification: C72, D72, J78

Suggested Citation

Fallucchi, Francesco and Quercia, Simone, Affirmative Action and Retaliation in Experimental Contests (June 30, 2017). Available at SSRN: https://ssrn.com/abstract=2999595 or http://dx.doi.org/10.2139/ssrn.2999595

Francesco Fallucchi

LISER ( email )

11, Porte des Sciences
Campus Belval – Maison des Sciences Humaines
Esch-sur-Alzette, L-4366
Luxembourg

Simone Quercia (Contact Author)

University of Bonn ( email )

Institute for Applied Microeconomics
Adenauerallee 24 - 42
Bonn, 53113
Germany

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