Abstract
Previous theoretical work examining labor tournaments concluded that an affirmative action program will always reduce the effort supplied by agents, thereby reducing output and profit for the tournament administrator; however, experimental results sometime contradict this conclusion. In the context of a labor tournament I demonstrate that there exists an affirmative action program that induces both types of agents to provide greater effort. In some instances the effort maximizing affirmative action program will also give both types of agents an equal chance of winning the tournament.
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Notes
Andrew Schotter and Keith Weigelt, “Asymmetric Tournaments, Equal Opportunity Laws, and Affirmative Action: Some Experimental Results,” Quarterly Journal of Economics, CVII (1992), 517–518.
Given the restrictions on parameter values, the greater-than-mode solution will always yield positive effort levels. However, some additional restrictions are necessary to guarantee that the less-than-mode solution produces positive effort levels. The numerator of \(e_{j,ltm}^ * \) will be positive if k < 2a and the denominator of \(e_{j,ltm}^ * \) will be positive if \(c < 8a^{2} \alpha \mathord{\left/ {\vphantom {\alpha {{\left( {{\left( {\alpha - 1} \right)}{\left( {M - m} \right)}} \right)}}}} \right. \kern-\nulldelimiterspace} {{\left( {{\left( {\alpha - 1} \right)}{\left( {M - m} \right)}} \right)}}\). Thus an upper bound on both k and c will guarantee positive effort level for the less-than-mode solution.
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Fain, J.R. Affirmative Action Can Increase Effort. J Labor Res 30, 168–175 (2009). https://doi.org/10.1007/s12122-009-9062-9
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DOI: https://doi.org/10.1007/s12122-009-9062-9