Are there measurable benefits in using a lottery to select leaders? A scientific experiment

Short answer: Yes, and no!

Longer answer:

Hubris is a tendency of leaders to hold an overly confident view of their own capabilities and to abuse power for their own selfish goals, sometimes with disastrous consequences for organizations. A major reason for hubris is the rigorous selection process leaders typically undergo. This study proposes a governance mechanism used successfully in history to tackle hubris: partly random selections, which combine competitive selections by competence with lotteries. A frequently voiced concern about the use of lotteries is that it takes no account of the competence of the leader chosen. We propose that partly random selections can mitigate the disadvantages of both competitive selections alone and lotteries alone and reduce hubris in leaders. We conduct a test of this governance mechanism by means of a computerized laboratory experiment. Our results show that partly random selections significantly reduce the hubris of group leaders. [my emphasis]

This is the Abstract from the Report. The full citation is: Joël Berger; Margit Osterloh; Katja Rost; Thomas Ehrmann (2020, May 13) ‘How to prevent leadership hubris? Comparing competitive selections, lotteries, and their combination’ The Leadership Quarterly, ISSN: 1048-9843  http://doi.org/10.1016/j.leaqua.2020.101388 (paywall)

In order to test their theory, this group of Swiss and German scientists conducted an experiment, using a method instantly recognisable to experimental economists (and others, but they are the ones I’m familiar with). Their hypothesis was that a lottery could play a useful part in limiting hubris when selecting leaders.

We conducted a computerized laboratory experiment   ….  864 students of the University of Zurich and ETH Zurich, were randomly selected from a pool of students who had volunteered to participate in behavioral experiments for monetary compensation. Participants on average gained USD 30 for 45 min……The 864 participants were randomly selected into groups of six and randomly assigned to one of three treatment conditions.

Wow! As you can see, this sort of experiment is not cheap, so well done to the guys in Zurich to obtain the funds from the Swiss government to conduct an experiment on lotteries-for-jobs. Note, too, the use of a randomly selected sample and sub-samples. Ok, so it’s students, it generally is in these scientific tests, but for obvious practical reasons.

Briefly, the experiment proceeded thus: A leader for each group were produced by one of three methods. 1. Using a general knowledge test and appoint the top scorer; or 2. Same test, but select at random from the top three scorers; or 3. A simple lottery where every member of the group has an equal chance.

How ‘hubris’ of the selected leaders was measured was complicated, and if you want know, you’ll have to read the article, but it did involve the well-known ‘Prisoner’s Dilemma Game’. It was from this, and 11 pages of statistical analysis of regression models that the conclusion was reached.

Our study follows a pioneering approach to investigate an unusual selection method for appointing leaders in organizations, partly random selection. This selection method has been extensively used in history but has nearly been forgotten. Today, random decisions are considered by many people to be “irrational”. Our study shows that purposeful random selection, in particular combining competitive selections with a random component, is a rational and promising way of recruiting leaders that tackles hubris in overconfident leaders. Our proposal to “draw your CEO by lot” is provocative but may be promising.

Most of the members of this group engage in philosophical discussion, where the merits of a proposal are a matter of persuasive rhetoric. Elsewhere, exhortations to ‘follow the science’ abound, and mere rhetoric is treated with caution. Even calling in aid ‘common-sense’ can be suspect.

This is, I believe, the first time any hypothesis of us Kleroterians has been subject to what has been described as ‘The gold standard of science’. I have another example from Levitt of Freakonomics fame which almost constitutes Science, which I will post about later.

A lottery for top jobs is not such a crazy idea

So says Amanda Goodall in an article in the Financial Times 9 Sept 2020.  You can read the article in full here (dodging the FT paywall!).

http://www.amandagoodall.com/FTRandom2020-09-07_101201.pdf

Dr Goodall of the Cass Business School, London has produced many papers on management and HR. She has tried to promote the idea of Lotteries for Jobs with Margit Osterloh, a Swiss academic.

Amanda tells me “It is a hard one [the idea of lotteries for jobs] to get off the ground. It has been hard to publish our article.”

It is very rewarding to find others in the field working on this form of ‘Local Democracy’ as Elster calls it. There are further developments which I will post here shortly.

Now even the visa lottery is unsafe?

According to the NYT,

a small number of giant global outsourcing companies had flooded the [U.S. H1B visa lottery] system with applications, significantly increasing their chances of success. […O]ne of the outsourcing companies applied for at least 14,000.

What has happened to the ‘sanitizing’ effect of the lottery?

Does it matter that well-resourced companies ‘game’ this lottery?

[‘Outsourcing‘: A practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally. (investopia) In the UK this practice is known as ‘sub-contracting’.]

Socialism in the USA — and they love it!

I’m sure most of you know about the lottery used to allocate newly qualifying players to the NFL football teams. But it unusual to see this described as ‘Socialism’ in the New Statesman, a major UK political magazine.

You can read the full article here (no paywall): The socialist principles at the heart of American Football.

Why women fail to take an equal share of top posts in academia

Here’s a nice piece in today’s Irish Times, showing clearly the need for lottery selection in jobs.

It asks the question: Why women (despite being over 50% of the faculty staff) fail to take an equal share of top posts in academia?

You can read the article in full (and for free!) at

http://www.irishtimes.com/opinion/why-women-fail-to-take-an-equal-share-of-top-posts-in-academia-1.2108539.

In the comments section we the usual reaction to any suggestion of ‘affirmative action’

“Here we go, more feminist claptrap. All academic posts must be based on merit.”

To which a wise commentator replies: “You think merit has much to do with academic appointments? There’s usually an assessor’s box called suitability which you can fill with subliminal prejudices: plays golf, politics, sounds like me etc”.

While waiting for grand schemes of sortitionist democracy to be implemented, wouldn’t it be nice to have a bit of genuine equality based on lottery selection over the qualified candidates?

Spain eurozone crisis: Where jobs are a lottery

In a Spanish town where one in three people are without a job, getting one can depend quite literally on the luck of the draw.

Alameda is surrounded by neat rows of olive trees that stretch for miles towards the distant sierra. Two hours east of Seville, the town is a maze of narrow streets lined by orange trees and whitewashed houses.

Continue reading

Randomness vs. Stupidity

Randomness vs. Stupidity is the eye-catching front cover of the latest issue of Improbable Research.

These guys have form, having picked our Sicilian friends, Pluchino et al. for their ‘IgNobel Prize’ in 2010. It was they who suggested, using maths, that we’d be no worse off using randomness to pick politicians and employees. (Earlier entries on this topic have already appeared here in equality-by-lot.)

As well as this issue devoted to this topic, the Editor, Marc Abrahams, has a 2-page spread in the London Observer, (which you can read at http://www.guardian.co.uk/science/2012/aug/19/most-improbable-scientific-research-abrahams).

In the article, Abrahams refers to an old-ish paper by Phelan (2000) which seems to support the idea of random promotion: “random promotion systems (supposedly a baseline condition) outperformed up-or-out and relative merit-based systems …”.

I am greatly encouraged that my hobby-horse of lotteries for hiring, firing and promoting employees is supported by these studies, and that they are getting a widespread airing in mainstream media.

Now, is there anyone else who might be interested in studying ‘Lotteries for Jobs’?