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Subjective Performance and the Value of Blind Evaluation

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  • Curtis R. Taylor
  • Huseyin Yildirim

Abstract

The incentive and project selection effects of agent anonymity are investigated in a setting where an evaluator observes a subjective signal of project quality. Although the evaluator cannot commit ex ante to an acceptance criterion, she decides up front between informed review, where the agent's ability is directly observable, or blind review, where it is not. An ideal acceptance criterion balances the goals of incentive provision and project selection. Relative to this, informed review results in an excessively steep equilibrium acceptance policy: the standard applied to low-ability agents is too stringent and the standard applied to high-ability agents is too lenient. Blind review, in which all types face the same standard, often provides better incentives, but it ignores valuable information for selecting projects. The evaluator prefers a policy of blind (respectively informed) review when the ability distribution puts more weight on high (respectively low) types, the agent's pay-off from acceptance is high (respectively low), or the quality signal is precise (respectively imprecise). Applications discussed include the admissibility of character evidence in criminal trials and academic refereeing. Copyright 2011, Oxford University Press.

Suggested Citation

  • Curtis R. Taylor & Huseyin Yildirim, 2011. "Subjective Performance and the Value of Blind Evaluation," Review of Economic Studies, Oxford University Press, vol. 78(2), pages 762-794.
  • Handle: RePEc:oup:restud:v:78:y:2011:i:2:p:762-794
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    File URL: http://hdl.handle.net/10.1093/restud/rdq005
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    Cited by:

    1. Sascha Baghestanian & Sergey V. Popov, 2014. "On Publication, Refereeing, and Working Hard," Economics Working Papers 14-04, Queen's Management School, Queen's University Belfast.
    2. Barbos, Andrei, 2013. "Project screening with tiered evaluation," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 293-306.
    3. Helmut Bester & Johannes Münster, 2016. "Subjective evaluation versus public information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 61(4), pages 723-753, April.
    4. Henry, Emeric & Ottaviani, Marco, 2017. "Research and the Approval Process: The Organization of Persuasion," CEPR Discussion Papers 11939, C.E.P.R. Discussion Papers.
    5. Raphael Boleslavsky & Bruce Carlin & Christopher Cotton, 2017. "Competing for Capital: Auditing and Credibility in Financial Reporting," Working Papers 1377, Queen's University, Department of Economics.
    6. Andrei Barbos, 2014. "Imperfect evaluation in project screening," Journal of Economics, Springer, vol. 112(1), pages 31-46, May.
    7. Boleslavsky, Raphael & Cotton, Christopher, 2012. "Grade Inflation and Education Quality," MPRA Paper 66119, University Library of Munich, Germany.
    8. Pierre Fleckinger & Matthieu Glachant & Gabrielle Moineville, 2017. "Incentives for Quality in Friendly and Hostile Informational Environments," American Economic Journal: Microeconomics, American Economic Association, vol. 9(1), pages 242-274, February.
    9. Amy Farmer & Paul Pecorino, 2013. "Discovery and Disclosure with Asymmetric Information and Endogenous Expenditure at Trial," The Journal of Legal Studies, University of Chicago Press, vol. 42(1), pages 223-247.
    10. Chen, Bin R., 2015. "Subjective performance feedback, ability attribution, and renegotiation-proof contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 155-174.

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