Competence and likeability and how increased power can make you worse off

One of the great benefits of Web 2.0 is the way in which it facilitates collaboration and information exchange in all manner of ways.  And one of the upshots of this is that it improves the market for reputation.  It does so by speeding up the process itself – so people who have something to say can publish and be noticed pretty much immediately – instead of waiting ages to build their reputations and careers.

Also, it has this habit of cutting through lots of other things which in some sense should be extraneous.  Some of the guys who won the NetFlix prize ($1 mil for producing a 10% improvement in the NetFlix algorithm for making recommendations of movies to watch based on past choices and ratings by a customer) were rank amateurs who were keen enough to get themselves up to speed to help win the prize. This isn’t how you make progress in academia or in most of the private sector (You can of course can start your own business, but that’s a big commitment, and it is the nature of many intellectual contributions that their value cannot be ‘monetised’ effectively).

As we argued in the Government 2.0 Taskforce Report, “the ethic of voluntarism coupled with the openness of online collaboration has typically led to a culture in which status and recognition are a function of the quality of contribution. This is judged by those who share an interest in the common ambitions of the community or network itself.”  I tried to represent this in the attached slide, which shows how, so long as there is stable identity to a person’s contributions to a discussion (including pseudonymous identity) reputation builds quickly which leads to the source of the insight gaining some more or less appropriate level of authority.  Almost none of the people who read and quoted ‘Tanta’ including researches for the US Federal Reserve knew her by any name other than that, but that was enough because her numerous contributions on the blog ‘Calculated Risk’ were so obviously well informed and devoid of any interest in misleading anyone.

We all know that in organisations this is, <<irony>>very occasionally<</irony>>, not the way things work. You know the kind of thing – where keeping your nose clean is more important than doing a good job, where, to use Keynes’ line, failing conventionally is a better career move than succeeding unconventionally.

Economists ought to be interested in these phenomena which drive organisations away from their best possible performance, but because they raise issues which somehow don’t fit with their tool kit, they get ignored.  The book the Wisdom of Crowds did show some interest in these phenomena and how they can undermine good decision making.

Anyway, I came across two interesting themes of research by one Tiziana  Casciaro. In one she documents how little competence at doing a job counts for compared with likeability in people’s preferences in work colleagues. No great surprises there when I look at my own preferences, but still a strong indication of some obstacles to the most effective collaboration within organisations. The other When more power makes actors worse off (pdf) explores ways in which imbalances in power relationships can reduce the efficiency with which two parties negotiate over some surplus, so much so that more is foregone as a result of the power imbalance than might have been available to the more powerful partner if they’d had less power. Read the paper for a more elaborate explanation.

Both papers put me in mind of the ways in which Web 2.0 might be making things better.  On the internet as they say, no one knows you’re a dog. It doesn’t matter so much what your social skills are, if you can help out doing something, you can surface and do the work.  The paper on power relationships is not about the cost of imbalances of power on information flows.  It’s on the cost of negotiating over the surplus – where the default rule of equal sharing can save so much time energy and resources, but isn’t consistent with those in positions of greater power seeking to take advantage of and preserve that power – and the resentment of the less powerful. But I’d like to see a similar study on the costs of imbalances of power in the flow of information. My hypothesis would be that it’s large and that it’s one explanation for how dysfunctional large organisations can be.