A Theory of Group Inequality

Seung Han Yoo

No 1309, Discussion Paper Series from Institute of Economic Research, Korea University

Abstract: This paper offers a model in which there is direct competition between different groups. We deliberately endow an environment with many employers and workers in which opportunities are limited such that each employer is randomly matched with two workers from the entire worker population, which consists of two ex ante identical sub-groups, and selects at most one of them. We show that with the competition, a set of feasible equilibria has a con.ict structure unlike the conflict-free structure found in typical statistical discrimination models, and that we can find employers' strategy such that employers benefit from discrimination, and this strategy can be sustained as a collusion between employers and an advantaged group in a repeated game.

Keywords: Statistical discrimination; Group inequality; Asymmetric information (search for similar items in EconPapers)
JEL-codes: D63 D82 J71 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:iek:wpaper:1309

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