Cooptation: Meritocracy vs. Homophily in Organizations

Résumé

The paper investigates factors that undermine meritocracy and policies that may restore it. To this purpose, it analyzes the Markovian dynamics, the entrenchment and the welfare properties of an organization whose members’ cooptation decisions are driven by two motives: quality and homophily. It investigates policy interventions (affirmative action, quality assessment exercises, overruling of majority decisions) and analyzes when these have unintended consequences. The paper also generates a rich set of testable implications.