Competitive Careers as a Way to Mediocracy
Matthias Kräkel ()
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich
We show that incompetitive 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 may be be outweighed by a productivity effect that favors high effort choices by the more talented individuals.
Keywords: career competition; contest; mediocracy (search for similar items in EconPapers)
JEL-codes: D72 J44 J45 M51 (search for similar items in EconPapers)
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Journal Article: Competitive careers as a way to mediocracy (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:286
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