A literature has developed on whether discrimination in the marketplace due to prejudice disappears in the long run. Whether employers who do not want to discriminate will eventually compete away all discriminating employ- ers depends not only on the distribution of tastes for discrimination among potential employers, but critically also on the nature of firm production functions. Of greater significance empirically is the long run discrimination by employees and customers, who are far more important sources of market discrimination than employers. There is no reason to expect discrimination by these groups to be competed away in the long run unless it is possible to have enough efficient segregated firms and.
