Osaka Workshop on Economics of Institutions and Organization (#159)

When multiple forces potentially underlie discriminatory behavior it is difficult to parse the sources of discrimination, rendering proposed policy solutions as speculative. This study advances an empirical approach to parse two specific channels of discrimination: customer side and manager side bias. To showcase our general idea, we combine proprietary data and several publicly available data sets to identify channels of discrimination within the Major League Baseball draft. In doing so, we show that customer preferences are importantly linked to the players drafted at the top end of the draft–players who are most likely to receive immediate public attention and end up playing for the club. Alternatively, we find manager homophily in the latter parts of the draft, when players who receive little attention and have a scant chance to ever play with the club are drafted. The opportunity cost of expressing such preferences is considerable foregone success of the club. Our results have general implications for future work measuring discrimination and how to tackle the multiple channel problem. 

Abstract：Gwen-Jiro Clochard