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Journal of Economic Theory and Econometrics
Journal of the Korean Econometric Society
On Discrimination with Competition between Groups
Vol.30, No.4, December 2019, 1–12
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Seung Han Yoo
(Korea University)
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Abstract
Statistical discrimination explains that two ex ante identical groups can have two different qualifications due to asymmetric information and self-fulfilling equilibria. In the typical statistical discrimination models, however, there is no interaction between groups. This paper offers a statistical discrimination model with a continuous signaling in which two groups compete for employment. We compare exclusive equilibria, in which no worker in one group makes a human capital investment, with symmetric equilibria, and show that discrimination as well as non-discrimination can be Pareto optimal under a certain environment.
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Keywords
Statistical Discrimination, Group Inequality, Asymmetric Information |
JEL classification codes
D63, D82, J71 |
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