American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Asymmetric Players in a Meritocracy: A Case for Affirmative Action
American Economic Journal: Microeconomics
(pp. 454–75)
Abstract
We model decisions to apply for college admission, attend job auditions, or run for C-suite positions as costly entry into meritocracies, where the entrant with the highest ability wins a reward. Ability is privately known and players generically differ in commonly known characteristics such as ability distributions, entry costs, or payoffs from winning. Any infinitesimal difference leads to wildly different equilibrium entry probabilities, explaining large dispersion in representation of comparable but nonidentical population groups. Affirmative action policies such as handicapping advantaged players or surcharging them to subsidize disadvantaged players increase participation rates of disadvantaged players and, in return, increase social welfare.Citation
Hossain, Tanjim, and John Morgan. 2025. "Asymmetric Players in a Meritocracy: A Case for Affirmative Action." American Economic Journal: Microeconomics 17 (3): 454–75. DOI: 10.1257/mic.20220362Additional Materials
JEL Classification
- D82 Asymmetric and Private Information; Mechanism Design
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- J16 Economics of Gender; Non-labor Discrimination
- J22 Time Allocation and Labor Supply
- K31 Labor Law
- M51 Personnel Economics: Firm Employment Decisions; Promotions