Favoritism

Yann Bramoullé and Sanjeev Goyal

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Favoritism is the act of offering jobs, contracts and resources to members of one’s social group in preference to outsiders. Favoritism is widely practiced and this motivates an exploration of its origins and economic consequences. Our main finding is that individuals have an interest to trade favors over time and that this will come at the expense of others, who are outside their group. We show that favoritism is relatively easier to sustain in smaller groups. Favoritism entails social costs as it usually leads to inefficient allocations. However, favoritism can lead to payoff advantages for larger groups. Productivity enhancing investments are larger in groups which practice favoritism. The availability of investment opportunities can reinforce payoff inequalities across groups.

Keywords: Herding (search for similar items in EconPapers)
Date: 2009-10-12
References: Add references at CitEc
Citations:

Downloads: (external link)
https://files.econ.cam.ac.uk/repec/cam/pdf/cwpe0942.pdf

Related works:
Journal Article: Favoritism (2016)
Working Paper: Favoritism (2016)
Working Paper: Favoritism (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:0942

Access Statistics for this paper

More papers in Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Bibliographic data for series maintained by Jake Dyer ().