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| Author: | Blume, L.E. |
| Title: | The dynamics of statistical discrimination |
| Journal: | Economic Journal
2006 : NOV, VOL. 116:515, p. F480-F498 |
| Index terms: | models employment learning public policy equilibrium analysis |
| Freeterms: | Markov analysis |
| Language: | eng |
| Abstract: | This article demonstrates how learning dynamics select among equilibria (hereafter as: eq-a.) in a statistical discrimination model of employment. The static market model exhibits multiple eq-a. The belief revision dynamics generate a Markov market process which in the long run is mostly near only one of the static eq-a., regardless of initial conditions. Usually policy effects appear in comparative statics. However, in here policy is also seen to effect which equilibrium is selected even without any comparative statics effect at all. |
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