Favoritism

Yann Bramoullé and Sanjeev Goyal

Cahiers de recherche from CIRPEE

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: Favoritism; nepotism; reciprocity; repeated games (search for similar items in EconPapers)
JEL-codes: C73 D71 J71 O10 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-gth and nep-soc
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Related works:
Journal Article: Favoritism (2016)
Working Paper: Favoritism (2016)
Working Paper: Favoritism (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:0941

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