Attentional Role of Quota Implementation

CERGE-EI Working Paper Series No. 645

45 Pages Posted: 30 Dec 2019

See all articles by Andrei Matveenko

Andrei Matveenko

University of Mannheim - Department of Economics

Sergei Mikhalishchev

Durham University

Date Written: December 1, 2019


This paper introduces a new role of quotas, e.g., labor market quotas: the attentional role. We study the effect of quota implementation on the attention allocation strategy of a rationally inattentive (RI) agent. Our main result is that an RI agent who is forced to fulfill a quota never hires the candidates without acquiring information about them, unlike an unrestricted RI agent who in some cases bases her decision on prior belief only. We also show that in our context quotas are equivalent to other types of affirmative policies such as subsidies and blind resume policy. We show how our results can be used to set a quota level that increases the expected value of the chosen candidate and also decreases statistical discrimination and discrimination in terms of how much attention is paid to each applicant. At the same time, quota implementation could be destructive if the social planner has imperfect information about the parameters of the model.

Keywords: discrete choice, rational inattention, multinomial logit, quotas

JEL Classification: D63, D81, D83, H23, J08

Suggested Citation

Matveenko, Andrei and Mikhalishchev, Sergei, Attentional Role of Quota Implementation (December 1, 2019). CERGE-EI Working Paper Series No. 645, Available at SSRN: or

Andrei Matveenko (Contact Author)

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim

Sergei Mikhalishchev

Durham University ( email )

Old Elvet
Mill Hill Lane
Durham, Durham DH1 3HP
United Kingdom

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