The Limits of Meritocracy

By John Morgan, Justin Tumlinson, Felix J Vardy

November 1, 2018

Preview Citation

Format: Chicago

John Morgan, Justin Tumlinson, and Felix J Vardy. The Limits of Meritocracy, (USA: International Monetary Fund, 2018) accessed November 5, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We show that too much meritocracy, modeled as accuracy of performance ranking in contests, can be a bad thing: in contests with 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.

Subject: Budget planning and preparation, Competition, Financial markets, Income inequality, National accounts, Public financial management (PFM)

Keywords: Aggregate output, Budget planning and preparation, Competition, Competition effect, Contest organizer, Efficiency, Equilibrium behavior, Income inequality, Level Playing Field, Meritocracy, Output measure, Participation prize, Prize schedule, Study contest design, WP

Publication Details

Pages:

87
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/231
Stock No:

WPIEA2018231
ISBN:

9781484381175
ISSN:

1018-5941

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