We study minority representation in the workplace when employers engage in optimal sequential search and minorities convey noisier signals of ability than mainstream job candidates. The greater signal noise makes it harder for minorities to change employers' prior beliefs. When employers are selective, this leads to minority underrepresentation in the workplace. Diversity improves when the cost of interviewing, the average skill level of candidates, or the opportunity cost of not hiring increases. Reducing the cost of firing also increases minority representation. When employers are sufficiently unselective, the rigidity of employers' beliefs leads to overrepresentation of minorities. (JEL D83, J15, J24, J71, M12, M51)
We study the value of commitment in sequential contests when the follower faces small costs to observe the leader's effort. We show that the value of commitment vanishes entirely in this class of games. By contrast, in sequential tournaments-games where, at a cost, the follower can observe the effectiveness of the leader's effort-the value of commitment is preserved completely provided that the observation costs are sufficiently small.
Political commentators warn that the fragmentation of the modern media landscape induces voters to withdraw into ‘information cocoons' and segregate along ideological lines. We show that the option to abstain breaks ideological segregation and generates ‘cross‐over' in news consumption: voters with considerable leanings towards a candidate demand information that is less biased towards that candidate than voters who are more centrist. This non‐monotonicity in the demand for slant makes voters' ideologies non‐recoverable from their choice of news media and generates disproportionate demand for media outlets that are centrist or only moderately biased. It also implies that polarisation of the electorate may lead to an ideological moderation in news consumption.
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