Equal Opportunity Laws, Affirmative Action And Asymmetric Tournaments: An Experimental Evidence

Since 1980s, rank order tournaments as competitive compensation mechanisms have become quite popular for providing incentives in employment relationships. Through the rank-order tournaments is highly simplified and abstract,it a suitable starting point of research for the majority of scholars to explore the relative performance incentive mechanism. Specially,it has been expanded to unfair tournament,uneven tournament,as well as affirmative action which is closer to reality. In the unfair tournament,we changed the rules so that the output of one member of each subject pair had to exceed the other's by some output before that member would receive the high fixed payment M. In the uneven tournament,that subject was assigned a cost functionαtimes (α≥1)greater than the other. The affirmative action combines with unfair tournament and uneven tournament,and gives cost-disadvantaged subjects some outputs for additional compensation. We are interested in the following three problems. Firstly,to deal with the discrimination in unfair tournaments ,whether tournament administrators should treat equally for all employees or not,that is,implement fair opportunity law. Secondly,how would employees with different ability choose effort level in the uneven tournament? Does the problem about the Hare and Tortoise arise? Finally , does employees with low ability be given good care or additional compensation , that is , would be implemented affirmative action program? Implementing affirmative action improves emphasis on efficiency to some degree so that the fairness was impaired?This thesis,under the analysis frame of tournament,intends to conduct an experimental study to ensure whether the social policies fighting against the unfairness of workplaces will decrease impacts on the total yield and the implementation of affirmative action. Seven experiments investigated the impact of tournament asymmetries on subject behavior. We comes to the following conclusion by carrying out seven experiments employing 130 paid undergraduate and postgraduate student volunteers. To begin with,Subjects behavior the slight oversupply of effort in all experiments,that is,their mean effort level remained above their equilibrium level. So we did not find the subjects manifested"collusion"in all experiments,but this caused decrease of their average revenue. In the next place,our result,provided they have external validity,will prove that the rule fairness is probably the prerequisite of efficiency. The theorem of opportunity fairness obviously benefits the disadvantaged subjects:This rule enhances former disadvantaged subjects'rate of advancement (i.e. winning probability) and balanced payment. More importantly,the carrying out of opportunity fairness really improves the tournament performance. If the salary gap keeps fixed,it can heighten all agents'endeavor levels. Hence,this practically increases the tournament supervisor's (employer's) revenue. The theorem of opportunity fairness does not need to impetrate the manager's social conscience at all. The enterprises should prohibit the unfairness of workplaces for the sake of their interests. There exists no mutual replacement between rule fairness and efficiency. Thirdly,as the asymmetry of agents'abilities gradually broadens , both of the advantaged subjects and the disadvantaged subjects will lessen their choices of endeavor levels. It reveals that it might be the optimal strategy of enterprises arranging the employees'positions on the basis of their abilities. Meanwhile,it also provides the peer effect with strong power to support the experimental evidence. Fourthly,the implementation of affirmative action does not increase employees'total yield or raise the employer's revenue. Finally,in our seven experiments,the endeavor levels that the subjects chose in the first or the first two rounds laid prominent impacts on their endeavor levels that they paid out,which showed that there existed learning effect in our tournament experiments. However,the employees'fortune and the winning in the former round did not obviously affect their endeavor levels statistically.In conclusion,for enterprises,the carrying out of opportunity fairness and restricting the affirmative action of some employees can not only raise the employees'total yield but also decrease the transaction cost that enterprises spend carrying out these policies so as to enormously increase the employers'revenues. For the governments,the author suggests re-thinking the preferential policies of disadvantaged groups like the minority students and re-considering the affirmative action such as progressive tax in personal income,which can heighten social members'work initiative and increase governments'revenues.