Some Experimental Evidence on the Coate and Loury Model of Affirmative Action

Coate and Loury (1993) suggest the impact of affirmative action on a negative stereotype is theoretically ambiguous leading to either: a benign equilibrium in which affirmative action eradicates the negative stereotype leading to equal proportional representation of the two groups; or alternatively a patronising equilibrium in which the stereotype persists. The current paper examines this theoretical ambiguity within the context of an experimental design. Although benign and patronising equilibria are equally plausible in theory, the experiments easily replicate the benign equilibrium, but find that a certainty effect leads to over-investment and divergence from the theoretically predicted patronising equilibrium.