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The Role of Selectivity in Hierarchical Social Systems

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  • Jose A. Garcia-Martinez

    () (Departamento de Estudios Económicos y Financieros. Universidad Miguel Hernández)

Abstract

We consider a selection process and a hierarchical institution in a dynamic model as in Harrington [3], where agents are "climbing the pyramid" in a rank-order contest based on the "up or out" policy. Agents are ranked according to the quality of their performances in a particular environment that they face in groups, and a fraction of the highest ranked agents are promoted. The size of this fraction characterizes the selectivity of the process, and we distinguish between local and global selectivity. We study the role of the degree of local and global selectivity in the dynamic process where agents' types differ in their expected performances. Surprisingly, we find that an increase in the selectivity of the process can be detrimental to the agents with the highest expected performances. In fact, it does not matter how small the expected performance of a particular type of agent is. If the degree of selectivity is high enough, that type of agent will survive. However, if the selectivity decreases, the only survivor is the agent with the highest expected performance.

Suggested Citation

  • Jose A. Garcia-Martinez, 2010. "The Role of Selectivity in Hierarchical Social Systems," Working Papers 2010-05, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
  • Handle: RePEc:mal:wpaper:2010-5
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    File URL: http://webdeptos.uma.es/THEconomica/malagawpseries/Papers/METCwp2010-5.pdf
    File Function: First version, 2010
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    References listed on IDEAS

    as
    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. Harrington, Joseph Jr., 1999. "The Equilibrium Level of Rigidity in a Hierarchy," Games and Economic Behavior, Elsevier, vol. 28(2), pages 189-202, August.
    3. Rosen, Sherwin, 1986. "Prizes and Incentives in Elimination Tournaments," American Economic Review, American Economic Association, vol. 76(4), pages 701-715, September.
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    1. repec:wsi:igtrxx:v:19:y:2017:i:04:n:s0219198917500190 is not listed on IDEAS

    More about this item

    Keywords

    Social hierarchy; Selection; Selectivity; Promotion;

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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