Luca Beltrametti, Gabriele Cardullo (Università di Genova)

Mercoledì, 9 ottobre - ore 15.00 - Aula 3F (DEM)

Ref. Prof. L. Bonatti

Abstract

This paper explores the economic effects of imperfect meritocracy in recruitment and career advancement. We compare two career promotion mechanisms: a fully meritocratic system and a "noisy" one that allows less talented workers to advance. Our model shows that imperfect meritocracy in promotions can boost worker effort through the "hope effect," potentially leading to higher output and welfare than a fully meritocratic system. The less talented benefit most under this scenario, while the highly talented are worse off. We conclude that when perfect meritocracy in recruitment is unattainable, it may not be optimal to enforce it in career advancement, offering insights for economic policy.