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We show that in competitive careers based on individual performance the least productive individuals may have the highest probabilities to be promoted to top positions. These individuals have the lowest fall-back positions and, hence, the highest incentives to succeed in career contests. This detrimental incentive effect exists irrespective of whether effort and talent are substitutes or complements in the underlying contest-success function. However, in case of complements the incentive effect may be be outweighed by a productivity effect that favors high effort choices by the more talented individuals.
Source: “Competitive Careers as a Way to Mediocracy” from Bonn Econ Discussion Papers, Discussion Paper 25/2009
I saw a version of this in Hollywood. People always ask me: why are movie stars so crazy? There are a number of reasons: emotional people are attracted to the arts, insecure people desire fame, money changes you, etc. But one factor I think doesn’t get enough attention is how painful the process of being an aspiring actor can be. You’re shown enormous and relentless amounts of disrespect, paid a pittance, and have no job security at all — if you’re lucky enough to even get jobs. After a few years, who would put up with this? I’ll tell you who: crazy people — the ones who stick around despite being constantly treated in a way no sane person with self-respect would put up with. Now this doesn’t say persistence = success in acting. Sorry, the volume of insane people is too high and the number of positions for stars is too low. But many who succeed will have this quality because it’s almost essential in order to survive the “tournament” of Hollywood.
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