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Maybe I Should Just Stay Home

Author

Listed:
  • Hossain, Tanjim
  • Morgan, John

Abstract

We model decisions to apply for a job or admission, attend an audition, or run for office as costly entry in contests where the outcomes solely depend on entrants' talent or ability. Player ability is privately known and players generically differ in commonly-known characteristics such as ability distributions, entry costs, or payoffs from winning. Any infinitesimal difference in these characteristics leads to wildly different equilibrium entry probabilities. Minute differences in characteristics imply large dispersions in representation even in a pure meritocracy. We can improve social welfare by handicapping advantaged players or by surcharging advantaged players to subsidize disadvantaged players.

Suggested Citation

  • Hossain, Tanjim & Morgan, John, 2022. "Maybe I Should Just Stay Home," MPRA Paper 111761, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:111761
    as

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    File URL: https://mpra.ub.uni-muenchen.de/111761/1/MPRA_paper_111761.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Meritocracy; diversity; heterogeneous contestants; endogenous costly entry; affirmative actions; stereotyping; overconfidence;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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