Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

We show that too much meritocracy, modeled as accuracy of performance ranking in contests, can be a bad thing: in contests with homogeneous agents, it reduces output and is Pareto inefficient. In contests with sufficiently heterogeneous agents, discouragement and complacency effects further reduce the benefits of meritocracy. Perfect meritocracy may be optimal only for intermediate levels of heterogeneity.

Merit (Ethics) --- Desert (Ethics) --- Moral desert (Ethics) --- Ethics --- Budgeting --- Finance: General --- Macroeconomics --- Firm Behavior: Empirical Analysis --- Market Design --- Allocative Efficiency --- Cost-Benefit Analysis --- Equity, Justice, Inequality, and Other Normative Criteria and Measurement --- Organization of Production --- General Financial Markets: General (includes Measurement and Data) --- Aggregate Factor Income Distribution --- National Budget --- Budget Systems --- Finance --- Budgeting & financial management --- Competition --- Income inequality --- Budget planning and preparation --- Financial markets --- National accounts --- Public financial management (PFM) --- Income distribution --- Budget --- Netherlands, The

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Do firms learn to forecast future business conditions after structural changes to the economy? How long does it take? We exploit German Reunification as a natural experiment, where Eastern are treated with ignorance about the distribution of market states, to test Bayesian learning. As predicted, Eastern firms initially forecast future business conditions worse than Western ones, but this gap gradually closes over a decade following Reunification. The slow convergence stems from differences in forward expectations rather than realized market conditions. These results warn of costly and drawn out adjustments to regime changes, as the trade wars, COVID19 and Brexit.