Asymmetric Tournaments, Equal Opportunity Laws, and Affirmative Action: Some Experimental Results

TLDR

The study evaluates how affirmative action and equal‑opportunity laws influence economic agents’ output. Affirmative action effects vary with the severity of a group’s cost disadvantage. The experiments show that equal‑opportunity laws and affirmative action consistently benefit disadvantaged groups, raise effort and profits, with larger gains when cost disadvantages are severe and smaller gains when they are slight.

Abstract

This paper assesses whether affirmative action programs and equal opportunity laws affect the output of economic agents. More precisely, we find that equal opportunity laws and affirmative action programs always benefit disadvantaged groups. Equal opportunity laws also increase the effort levels of all subjects and hence the profits of the tournament administrator (usually the firm). The effects of affirmative action programs depend on the severity of a group's cost disadvantage. When the cost disadvantage is severe, these programs significantly increase effort levels (and hence profits). The opposite is true when the disadvantage is slight.