The Cost of Work Discrimination: A Market Capture Differential Game Model

Mario Alberto García-Meza
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Mario Alberto García-Meza: Faculty of Economics, Accounting and Management (FECA), Universidad Juárez del Estado de Durango, Durango 34000, Mexico

Mathematics, 2021, vol. 9, issue 19, 1-10

Abstract: Discrimination in the workplace can be a source of opportunity costs for firms that desire to enter a new market. In this article, we model how an exogenous technological change introduces both new potential workers in the labor market and, as the economy grows, a new set of consumers for firms to conquer. We then use a differential model to show how the payoff of a firm that discriminates in the labor market loses potential market from this same demographic. Our results imply that anti-discriminatory policies within the firm constitute an important element for the solution of this problem, and that there might be incentives for the firms to apply such policies.

Keywords: discrimination; information asymmetry; differential games (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2021
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