Who should benefit from affirmative action? Ability, effort and discrimination as justifications for quota rules

Despite the growing evidence on consequences of affirmative action policies, little is known about the relation between the perceived fairness of affirmative action policies and their consequences for outcomes such as performance, willingness to compete and post-competition cooperation or retaliation. In this paper, we implement three types of affirmative action policies that reflect all determinants of individual performance: they favor individuals disadvantaged due to either (i) bad luck (discrimination), (ii) low ability, or (iii) low effort provision (e.g. due to working part-time), respectively. We are the first to study consequences of affirmative action policies based on low ability and low effort provision and to investigate how the perceived fairness of affirmative action policies relates to their consequences. We document substantial heterogeneity in the fairness perception of different affirmative action policies: affirmative action favoring bad luck individuals is perceived as fairest, followed by affirmative action in favor of individuals exerting low effort, while no affirmative action and affirmative action favoring individuals with low ability are perceived as least fair. This heterogeneity in fairness perception matters for the consequences of affirmative action policies. For example, the fairer an affirmative action policy is perceived to be, the higher is the observed willingness to compete of favored subjects. None of the affirmative action policies harms post-competition teamwork or induces retaliation. Finally, subjects favored by affirmative action seem to internalize affirmative action policies in post-competition interactions, e.g. they allocate more resources in a dictator game to other favored group members.