Selecting the Best
Research Seminars: Virtual Market Design SeminarThe Persistent Effects of Luck
The paper presented in this Virtual Market Design Seminar analyzes a model of organizational learning where agents’ performance reflects time-invariant unobservable ability, privately-chosen effort, and noise. The main result is that, even when performance is almost entirely random, maximizing the probability of identifying the best agent (“selective efficiency”) requires biasing final selection in favor of early winners. Making luck persistent, e.g. through fast-tracks, is thus rationalized by the pursuit of selective efficiency. Agents’ strategic efforts amplify the persistence of luck. Organizational learning also affects the persistence of initial advantages stemming from identity. Identity-dependent biases, e.g. gender-specific mentoring, create incentives that make selection both more efficient and more equitable.
People
Contact
Directions
Address
Online
maps
Click the button below to reload the content. (I agree to external content being displayed to me. Read more in our privacy policy).
,