Monday, January 16, 2006

Glory Road, Jackie Robinson, and The Economics of Discrimination

Since it's Martin Luther King's birthday, I though it the following piece was appropriate:

King Banaian at SCSU Scholars has a short piece on Jackie Robinson and Glory Road. (the new movie about the basketball team at Texas Western).

He makes a great point: that there's an economic cost to discrimination. After all, when you eliminate a portion of either your customers or your workers, you will suffer a cost. The converse of this is that if everyone else is discriminating, there's a "first mover" advantage: If you're the first to stop discriminating, you gain a competitive advantage. According to a number of accounts, neither Don Haskins (the TW coach) or Branch Rickey (the Dodgers' owner/manager) were primarily concerned about being civil rights pioneers. They were just trying to improve their teams' chances.

There are a lot of applications to this concept. One is that the more competitive the market, the less likely it is that there'll be discrimination, since the competitive advantage to being the first mover is greater. Another (the converse of the previous point) is that if the market is protected (either by regulation, geography, custom, or some other friction), discrimination becomes less costly.

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