Less Competition, More Meritocracy?
53 Pages Posted: 5 Dec 2018
Date Written: October 16, 2018
Uncompetitive contests for grades, promotions, and job assignments, which feature lax standards or consider only limited talent pools, are often criticized for being unmeritocratic. We show that, when contestants are strategic, lax standards and exclusivity can make selection more meritocratic. Strategic contestants take more risks in more competitive contests. Risk taking reduces the correlation between selection and ability. By reducing the noise engendered by strategic risk taking, dialing down competition can produce outcomes that better conform with the meritocratic ideal of selecting the best and only the best.
Keywords: selection contests, meritocracy, risk taking
JEL Classification: C72, D82, J01
Suggested Citation: Suggested Citation