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The limits of meritocracy

John Morgan, Justin Tumlinson and Felix Várdy

Journal of Economic Theory, 2022, vol. 201, issue C

Abstract: We show that meritocracy, in the sense of accuracy of performance ranking, can be too much of a good thing: in contests with sufficiently 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.

Keywords: Contests; Tournaments; Meritocracy; Contest design (search for similar items in EconPapers)
JEL-codes: D44 D82 (search for similar items in EconPapers)
Date: 2022
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Working Paper: The Limits of Meritocracy (2018) Downloads
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DOI: 10.1016/j.jet.2022.105414

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