TY  - JOUR
AU  - Fryer,Roland G.
AU  - Loury,Glenn C.
TI  - Categorical Redistribution in Winner-Take-All Markets
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10104
PY  - 2003
Y2  - November 2003
UR  - http://www.nber.org/papers/w10104
L1  - http://www.nber.org/papers/w10104.pdf
N1  - Author contact info:
Roland G. Fryer, Jr
Department of Economics
Harvard University
Littauer Center 208
Cambridge, MA  02138
Tel: 617/495-9592
Fax: 617/495-8570
E-Mail: rfryer@fas.harvard.edu

Glenn Loury
Department of Economics
Brown University
64 Waterman Street
Providence RI 02912
E-Mail: Glenn_Loury@brown.edu
AB  - This paper constructs a simple model of pair-wise tournament competition to investigate categorical redistribution in winner-take-all markets. We consider two forms of redistribution: category-sighted, where employers are allowed to use categorical information in pursuit of their redistributive goals; and category-blind, where they are not. It is shown that the equilibrium category-sighted redistribution scheme involves a constant handicap given to agents in the disadvantaged category. Equilibrium category-blind redistribution creates a unique semi-separating equilibrium in which a large pool of contestants exerts zero effort, and this pool is increasing in the aggressiveness of the redistribution goal.
ER  -