Recent Contributions to Theories of Discrimination

Abstract

This paper surveys the literature on theories of discrimination, focusing mainly on new contributions. Recent theories expand on the traditional taste-based and statistical discrimination frameworks by considering specific features of learning and signaling environments, often using novel information- and mechanism-design language; analyzing learning and decision making by algorithms; and introducing agents with behavioral biases and misspecified beliefs. An online appendix attempts to narrow the gap between the economic perspective on ``theories of discrimination'' and the broader study of discrimination in the social science literature by identifying a class of models of discriminatory institutions, made up of theories of discriminatory social norms and discriminatory institutional design.