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An Unexpected Role of Local Selectivity in Social Promotion

  • Garcia-Martinez, Jose A.
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    A selection process and a hierarchical promotion system in a dynamic model are considered as in Harrington (1998) and Garcia-Martinez (2010), where agents are "climbing the pyramid" in a rank-order contest based on the "up or out" policy. The population at any level of the hierarchy is matched in groups of n agents, and each group faces a particular environment. Agents are ranked according to the quality of their performances in each particular environment. The top k performing agents from each group are promoted. The fraction (k/n) characterizes the local selectivity of the process. The role of the degree of local selectivity in the dynamic process where agents' types differ in their expected performances is studied. For low selectivity, the selection process is not strong enough to overcome the inertia of the initial population. If selectivity increases, only the best-performing type of agent will survive. If the selectivity is increased far enough, the worst-performing type also survives, and the proportion for which they account at equilibrium increases as selectivity increases. Therefore, surprisingly, no matter how low the expected success rate of a type is, if the selection process has a high enough level of selectivity, agents of that type survive in the long run: Too much selectivity is always harmful to the best-performing type.

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    File URL: http://mpra.ub.uni-muenchen.de/36324/1/MPRA_paper_36324.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 36324.

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    Date of creation: Jan 2012
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    Handle: RePEc:pra:mprapa:36324
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    1. Fairburn, J.A. & Malcomson, J.M., 1995. "Performance, Promotion, and the Peter Principle," UFAE and IAE Working Papers 304.95, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    2. Hvide, Hans K. & Kristiansen, Eirik G., 2003. "Risk taking in selection contests," Games and Economic Behavior, Elsevier, vol. 42(1), pages 172-179, January.
    3. Joseph E Harrington Jr, 1998. "Electoral Selection and the Creation of Ideologues," Economics Working Paper Archive 397, The Johns Hopkins University,Department of Economics.
    4. 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.
    5. Edward P. Lazear & Sherwin Rosen, 1979. "Rank-Order Tournaments as Optimum Labor Contracts," NBER Working Papers 0401, National Bureau of Economic Research, Inc.
    6. Garcia-Martinez, Jose A., 2010. "Selectivity in hierarchical social systems," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2471-2482, November.
    7. Alos-Ferrer, Carlos, 1999. "Dynamical Systems with a Continuum of Randomly Matched Agents," Journal of Economic Theory, Elsevier, vol. 86(2), pages 245-267, June.
    8. Sherwin Rosen, 1985. "Prizes and Incentives in Elimination Tournaments," NBER Working Papers 1668, National Bureau of Economic Research, Inc.
    9. Joseph E Harrington Jr, 1999. "The Equilibrium Level of Rigidity in a Hierarchy," Economics Working Paper Archive 398, The Johns Hopkins University,Department of Economics.
    10. Vega-Redondo, Fernando, 2000. "Unfolding Social Hierarchies," Journal of Economic Theory, Elsevier, vol. 90(2), pages 177-203, February.
    11. Joseph E. Harrington & Jr., 1999. "Rigidity of Social Systems," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 40-64, February.
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