Selection And Efficiency In Hierarchical Social Systems
We examine the influence that the degree of stringency in the promotion processes of hierarchical systems has on the outcome of such selections at both the local and global level. We show that any change in the degree of stringency, whether an increase or a decrease, could cause counterintuitive effects. In our analysis, we consider a hierarchical system in which there is a large population of agents at each level. Specifically, this level is a continuum of two different kinds of agents, one with a greater expected performance (i.e., a higher expected success rate) than the other. The agents interact among themselves in groups and in an environment that is stochastic and idiosyncratic (for the group). The social institution promotes agents a posteriori, on the basis of their performance. We consider diverse systems for such promotion processes, with varying degrees of stringency, and study their long-run behaviour patterns. We find that the degree of stringency can be counter-productive for the homogeneity of a population in hierarchical systems. In the process for the selection of agents to be promoted, an increase in stringency beyond a certain point favours, surprisingly enough, agents with lower probabilities of success. Thus, the more stringent the system is, the more heterogeneous the population becomes in the long run, both kinds of agents survives. On the other hand, when the stringency of the system is maintained between two fixed thresholds, the more-successful agents are the only ones who survive. Finally, when the stringency of the system is too low, both homogeneous equilibria (we only consider two kinds of agents) are stable and the dynamics depend on the initial conditions, two basin of attraction appear.
|Date of creation:||Dec 2005|
|Publication status:||Published by Ivie|
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- Sherwin Rosen, 1985. "Prizes and Incentives in Elimination Tournaments," NBER Working Papers 1668, National Bureau of Economic Research, Inc.
- Joseph E. Harrington & Jr., 1999. "Rigidity of Social Systems," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 40-64, February.
- Hvide, Hans K. & Kristiansen, Eirik G., 2003.
"Risk taking in selection contests,"
Games and Economic Behavior,
Elsevier, vol. 42(1), pages 172-179, January.
- Harrington, Joseph E, Jr, 1998. "The Social Selection of Flexible and Rigid Agents," American Economic Review, American Economic Association, vol. 88(1), pages 63-82, March. Full references (including those not matched with items on IDEAS)
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