The Limits of Meritocracy
88 Pages Posted: 10 Dec 2018
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The Limits of Meritocracy
Date Written: November 2018
Abstract
We show that too much meritocracy, modeled as accuracy of performance ranking incontests, can be a bad thing: in contests with homogeneous agents, it reduces output and isPareto inefficient. In contests with sufficiently heterogeneous agents, discouragement andcomplacency effects further reduce the benefits of meritocracy. Perfect meritocracy maybe optimal only for intermediate levels of heterogeneity.
Keywords: Meritocracy, Efficiency, Level Playing Field, Firm Behavior: Empirical Analysis, Market Design, Equity, Justice, Inequality, and Other Normative Criteria and Measurement, Organization of Production
JEL Classification: D22, D47, D61, D63, L23
Suggested Citation: Suggested Citation