Information Technology Reference
In-Depth Information
costs less than $600. But if everyone is wearing a $600 suit, no one has an advantage over
the others due to his attire. If they had all spent $300 on their suits, there would have
been the same relative equity. The behavior of business school applicants is similar to an
arms race. The desire to seek an advantage leads to an escalation of consumption, even
if the eventual result is simply parity.
A disproportionate share of the best and brightest college students become concen-
trated in a few elite institutions. “The day has already arrived,” write Frank and Cook,
“when failure to have an elite undergraduate degree closes certain doors completely, no
matter what other stellar credentials a student might possess” [74, p. 11]. Many Wall
Street firms will not even interview candidates who did not graduate from one of a very
small number of top law schools. These law schools show a preference for graduates of
elite undergraduate programs. Hence high school students interested in reaching the top
of the legal profession know their best chance is to do their undergraduate work at an
elite school. The result is a tremendous competition for a relatively small number of
openings at these colleges, while in truth there are hundreds of top-quality public and
private colleges and universities in the United States.
Winner-take-all is not fair because it gives much greater rewards to the top perform-
ers than those whose performance is only slightly inferior. Here is an example from the
world of professional sports, where winnings and performance data are objective and
publicly available. Jim Furyk and Brian Bateman both play on the PGA Tour. Their skill
levels are very close (see Table 10.2), but near the end of the 2009 season, Furyk had won
99 times as much in prize money as Bateman.
Winner-take-all markets harm our culture. Here's why. People are social; they like to
read the same books and see the same movies as their friends. It gives them something
to talk about. Suppose two books have about the same appeal to a consumer, but one
of them is on a best-seller list. The consumer is more likely to select the topic on the
best-seller list, because it increases the probability she will encounter a friend who has
read it. But that means it's really important for a book publisher to get its books on the
best-seller list. Publishers know that books written by “name” authors have a greater
chance of making the best-seller list than books written by new authors. This knowledge
Metric
Brian Bateman
Jim Furyk
Driving distance (yards)
289.1
278.1
Driving accuracy (%)
56.23
70.24
Greens in regulation (%)
63.95
64.67
Putts/round
29.42
28.17
Scoring average
71.89
70.24
Tournaments entered
21
21
Winnings
$35,379
$3,514,215
TABLE 10.2
Comparison of personal statistics of PGA Tour professionals Brian Bateman
and Jim Furyk near the end of the 2009 season.
