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on the efficiency of team-based meritocracies

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  • Gunnthorsdottir, Anna
  • Vragov, Roumen
  • seifert, Stefan
  • McCabe, Kevin

Abstract

According to theory a pure meritocracy is efficient because individual members are competitively rewarded according to their individual contributions to society. However, purely individually based meritocracies seldom occur. We introduce a new model of social production called “team-based meritocracy” (TBM) in which individual members are rewarded based on their team membership. We demonstrate that as long as such team membership is both mobile and competitively based on contributions, individuals are able to tacitly coordinate a complex and counterintuitive asymmetric equilibrium that is close to Pareto-optimal, possibly indicating that such a group-based meritocracy could be a social structure to which humans respond with particular ease. Our findings are relevant to many contemporary societies in which rewards are at least in part determined via membership in organizations such as for example firms, and organizational membership is increasingly determined by contribution rather than privilege.

Suggested Citation

  • Gunnthorsdottir, Anna & Vragov, Roumen & seifert, Stefan & McCabe, Kevin, 2008. "on the efficiency of team-based meritocracies," MPRA Paper 8627, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:8627
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    More about this item

    Keywords

    social stratification; meritocracies; mechanism design; non-cooperative games; experiment; team production;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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