The Limits of Meritocracy

Author/Editor:

John Morgan ; Justin Tumlinson ; Felix J Vardy

Publication Date:

November 1, 2018

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

We show that too much meritocracy, modeled as accuracy of performance ranking in contests, can be a bad thing: in contests with homogeneous agents, it reduces output and is Pareto inefficient. In contests with sufficiently heterogeneous agents, discouragement and complacency effects further reduce the benefits of meritocracy. Perfect meritocracy may be optimal only for intermediate levels of heterogeneity.

Series:

Working Paper No. 18/231

English

Publication Date:

November 1, 2018

ISBN/ISSN:

9781484381175/1018-5941

Stock No:

WPIEA2018231

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

87

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