The meritocracy as a mechanism to overcome social dilemmas

Anna Gunnthorsdottir, Roumen Vragov and Kevin McCabe

MPRA Paper from University Library of Munich, Germany

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.

Keywords: social dilemmas; Nash equilibrium; non-cooperative games; coordination; mechanism design; experiment (search for similar items in EconPapers)
JEL-codes: D7 (search for similar items in EconPapers)
Date: 2007-02-10
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:2454

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