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Publications [#70068] of Huseyin Yildirim
Other
- "Subjective Performance and the Value of Blind Evaluation," with Curtis Taylor, (October, 2007). [pdf]
(last updated on 2007/10/22)Abstract:
We investigate the incentive and project screening effects of anonymity in a setting of subjective performance evaluation. If the review process is "blind", then the applicant's (payoff relevant) type is hidden from the reviewer. If the process is nonblind or "informed", then the reviewer observes the applicant's type directly. In either case, the evaluator receives a noisy signal on the quality of the agent's project and decides whether to accept or reject it. We find that if the signal is not verifiable, then informed evaluation results in an excessively steep equilibrium acceptance policy: the standard applied to low-ability applicants is too stringent and the standard applied to high ability applicants is too lenient. Blind review in which all applicants face the same standard often provides better incentives, but it discards valuable information for screening projects. We discover that blind review is more likely to be preferred by the evaluator when (1) the applicant pool is skewed toward high ability types; (2) the stakes from acceptance are relatively high for applicants; (3) both types of errors are relatively less costly; or (4) there is little competition among reviewers. We also discover that under blind review, the evaluator may benefit from a more diverse applicant pool. Keywords: Subjective performance, blind evaluation, informed evaluation, evaluation trap, evaluation externality JEL: C73, D02, D81