Abstract
The paper expounds a simple non-cooperative game, which can model discrimination in market and non-market transactions. The model has two equilibriums where individuals do not discriminate and several where they do. One non-discriminatory equilibrium dominates in the sense of Pareto all discriminatory equilibriums. The second non-discriminatory equilibrium is dominated by all other equilibriums. While there is no discrimination in the first-best outcome, the introduction of discrimination can thus be Pareto-improving in some circumstances. For instance, in the model, a move from an equilibrium where they face discrimination to another equilibrium where they discriminate too can sometimes make the members of a group better off, without making anyone else worse off. Another implication of the model is that interactions between officials of the state and ordinary citizens generate a greater number of potential patterns of discrimination than interactions between ordinary citizens.
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Notes
Varoufakis (2008) has used the hawk-dove game to model discrimination. The hawk-dove is a model of conflict between two players. When the two players belong to heterogenous populations, it has two evolutionary stable equilibriums, which consist for players of one population to use force (“play hawk”) and for players of the other population to submit to it (“play dove”) (Gintis, 2009; Selten, 1980). A structure of social interaction that is of an “us against them” variety can only have one form or another of coercion as a stable outcome.
In one specification, Ertürk and Shrivastava’s model reduces to a single copy of the stag-hunt. It then has two (2) equilibriums: one in which the “minority” segregates and the other in which it integrates the “majority”.
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Corriveau, L. The pure logic of discrimination. Const Polit Econ (2023). https://doi.org/10.1007/s10602-023-09419-8
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DOI: https://doi.org/10.1007/s10602-023-09419-8