Maybe I Should Just Stay Home

Hossain, Tanjim and Morgan, John (2022): Maybe I Should Just Stay Home.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Meritocracy, diversity, heterogeneous contestants, endogenous costly entry, affirmative actions, stereotyping, overconfidence
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design; J - Labor and Demographic Economics > J8 - Labor Standards: National and International > J82 - Labor Force Composition

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