Meritocracy, mobility, and the curse of privilege

The Freedom Center and Spring 2022 FC Talks series presents Anna Gunnthorsdottir (University of Arizona).

We develop a game-theoretic model of a merit-based socially mobile society. We show that such a society is very productive with a highly efficient equilibrium. We then extend the model by adding an exogenously determined privileged class that can avoid merit-based social mobility.

The addition of this privileged class reduces the society’s productivity and efficiency.

We test the equilibrium predictions for both “societies” in the laboratory. The game has two equilibria that differ in efficiency. The payoff dominant equilibrium is asymmetric and not easy to find. Yet, aggregates of naïve subjects tacitly coordinate this complex equilibrium near-instantaneously, precisely, and reliably.  While aggregate behavior can thus be predicted with great accuracy individuals change their strategies erratically over repeated play so that individual behavior is unpredictable. We discuss the policy implications of a merit-based society, the perceived fairness of meritocracy, the perceived freedom of choice in this game, and how incentives could be re-structed so that those with greater resources contribute their fair share to society.

Event Contacts
Kaveh Pourvand