And theories thus far 1. Discrimination is said to be costly to the discriminator. If so, firms which discriminate would lose out in competition for sales to firms which don't. For example, suppose a firm wants to make the most profits it can. The main task of discrimination theory is to explain why people would discriminate, if discrimination is costly to them.
Discrimination can persist only where there is monopoly or some other situation without competition.
Discrimination is a result of departures from competition 1. Discrimination is costly and therefore more likely to thrive in less competitive situations where its cost can be passed on to buyers. But government, unions, even monopoly can be anti-discrimination too. Where Becker says discriminators want physical distance, Thurow says they want material gain and social distance. Where Becker says discriminators may have to pay to satisfy their taste for discrimination, Thurow says material gain and social distance go hand in hand.