Competitive careers as a way to mediocracy

Matthias Kräkel

European Journal of Political Economy, 2012, vol. 28, issue 1, 76-87

Abstract: I show that in competitive careers based on individual performance the least productive individuals may have the highest probabilities to be promoted to top positions. These individuals have the lowest fall-back positions and, hence, the highest incentives to succeed in career contests. This detrimental incentive effect exists irrespective of whether effort and talent are substitutes or complements in the underlying contest-success function. However, in case of complements the incentive effect can be outweighed by a productivity effect that favors high effort choices by the more talented individuals. Switching from wages-attached-to-jobs to pay-for-performance at top career positions can be a solution to the mediocracy problem.

Keywords: Career competition; Contest; Mediocracy; Politicians (search for similar items in EconPapers)
JEL-codes: D72 J44 J45 M51 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:28:y:2012:i:1:p:76-87

DOI: 10.1016/j.ejpoleco.2011.09.001

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