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When more selection is worse
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Denrell, Jerker, Liu, Chengwei and Le Mens, Gaël (2017) When more selection is worse. Strategy Science, 2 (1). pp. 39-63. doi:10.1287/stsc.2017.0025 ISSN 2333-2050.
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Official URL: https://doi.org/10.1287/stsc.2017.0025
Abstract
We demonstrate a paradox of selection: the average level of skill among the survivors of selection may initially increase but eventually decrease. This result occurs in a simple model in which performance is not frequency dependent, there are no delayed effects, and skill is unrelated to risk-taking. The performance of an agent in any given period equals a skill component plus a noise term. We show that the average skill of survivors eventually decreases when the noise terms in consecutive periods are dependent and drawn from a distribution with a “long” tail—a sub-class of heavy-tailed distributions. This result occurs because only agents with extremely high level of performance survive many periods, and extreme performance is not diagnostic of high skill when the noise term is drawn from a long-tailed distribution.
Item Type: | Journal Article | ||||||
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Subjects: | H Social Sciences > HF Commerce | ||||||
Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||
Library of Congress Subject Headings (LCSH): | Success in business -- Mathematical models, Business failures -- Mathematical models | ||||||
Journal or Publication Title: | Strategy Science | ||||||
Publisher: | Institute for Operations Research and the Management Sciences (I N F O R M S) | ||||||
ISSN: | 2333-2050 | ||||||
Official Date: | 17 March 2017 | ||||||
Dates: |
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Volume: | 2 | ||||||
Number: | 1 | ||||||
Page Range: | pp. 39-63 | ||||||
DOI: | 10.1287/stsc.2017.0025 | ||||||
Status: | Peer Reviewed | ||||||
Publication Status: | Published | ||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||
Date of first compliant deposit: | 6 February 2017 | ||||||
Date of first compliant Open Access: | 12 July 2017 |
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