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Competitive careers as a way to mediocracy

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  • Kräkel, Matthias

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.

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Bibliographic Info

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 28 (2012)
Issue (Month): 1 ()
Pages: 76-87

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Handle: RePEc:eee:poleco:v:28:y:2012:i:1:p:76-87

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Web page: http://www.elsevier.com/locate/inca/505544

Related research

Keywords: Career competition; Contest; Mediocracy; Politicians;

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  1. The economics of the Peter principle
    by chris dillow in Stumbling and Mumbling on 2009-12-10 14:18:50

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