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The meritocracy as a mechanism to overcome social dilemmas

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  • Gunnthorsdottir, Anna
  • Vragov, Roumen
  • Mccabe, Kevin

Abstract

A new mechanism that substantially mitigates social dilemmas is examined theoretically and experimentally. It resembles the voluntary contribution mechanism (VCM) except that in each decision round subjects are ranked and then grouped according to their public contribution. The game has multiple mostly asymmetric, Pareto-ranked pure-strategy equilibria which are rather counterintuitive, yet experimental subjects tacitly coordinate the payoff-dominant equilibrium reliably and quite precisely. In the VCM grouping is random which, with its arbitrary relation to contribution corresponds to any grouping unrelated to output, for example grouping based on race or gender. The new mechanism resembles a meritocracy since based on how much they contribute; participants are assigned to strata that vary in payoff. The findings shed light on the nature of merit-based social and organizational grouping and provide guidelines for future research and application.

Suggested Citation

  • Gunnthorsdottir, Anna & Vragov, Roumen & Mccabe, Kevin, 2007. "The meritocracy as a mechanism to overcome social dilemmas," MPRA Paper 2454, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:2454
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    File URL: https://mpra.ub.uni-muenchen.de/2647/1/MPRA_paper_2647.pdf
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    Cited by:

    1. Angela Oliveira & Rachel Croson & Catherine Eckel, 2015. "One bad apple? Heterogeneity and information in public good provision," Experimental Economics, Springer;Economic Science Association, vol. 18(1), pages 116-135, March.

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    More about this item

    Keywords

    social dilemmas; Nash equilibrium; non-cooperative games; coordination; mechanism design; experiment;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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