In any job setting, there will be some promotion criteria that are less amenable to measurement than others. Often, if not always, what is difficult to measure is more important. For example,possessing “good judgment” is likely a more significant predictor of success as a law firm partner than the ability to bill a vast amount of hours. The first puzzle that this essay explores is why, in some promotion settings, organizations focus on less important, but measurable, criteria such as hours billed. The answer, we suggest, lies in the relationship between the objectively measurable criteria, on the one hand, and the subjective and less visible, but more important, attributes on the other hand. Under certain circumstances, a competition over the measurable criteria (such as hours billed or number of deals accomplished) can force the revelation of information on hard-to-measure subjective attributes of the candidate. For example, it is easier to evaluate the judgment of an associate who has amassed a number of deals than one who has not. The process of putting together deals likely generates some information about the associate’s good and bad judgment. In other words, while we may not think that a large number of billable hours alone should determine who makes partner, making billable hours the goal of a tournament can help generate information more relevant to the partner selection decision. Explaining the first puzzle leads to a second puzzle: Why do we see a rejection of tournaments in job settings where decisionmakers could use tournaments effectively to force information? In contexts where decisionmakers value the ability to exercise discretion or power, they may eschew information revelation schemes so as to be able to mask their true motivations behind a promotion. Nominations to the Supreme Court provide an example. There, the desire to push political agendas may lead to the intentional obscuring of the true merits of nominees. Last, the essay considers how objective rankings can force hard-to-obtain information outside the employment context. The focus is the much-debated US News rankings of law schools. We argue that the existence of the US News rankings forces law schools to reveal information that would not otherwise be made available.
Date of Authorship for this Version
law and economics
Choi, Stephen; Baker, Scott A.; and Gulati, Mitu, "The Rat Race as an Information Forcing Device" (2005). New York University Law and Economics Working Papers. 8.