Negative Side Effects of Affirmative Action - How Quotas Lead to Distortions in Performance Evaluation

Abstract

We study the impact of affirmative action on peer-review behavior. We conduct a real-effort tournament experiment, in which prizes are awarded according to peer-review results. Between treatments, we vary whether or not a quota is implemented and whether or not affirmed individuals face ex-ante procedural disadvantages. We find that quotas lead to distorted peer-reviews, where affirmed individuals receive significantly less favorable reviews than non-affirmed peers with similar performance. Distortions in peer-reviews are robust to changes in ex-ante procedural fairness and seem to be driven by enhanced competition among affirmed individuals.

Keywords: Affirmative action, Quota, Peer-review, Creative work, Real effort, Procedural fairness

JEL Classification: C92, J33, J71, M51