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Monday, April 5, 2010

Is There a Tax Prof 'Superstar Effect?'

Wall Street Journal, The Superstar Effect:

From the playing field to the boardroom, when one competitor is clearly the best, the others don't step up their game—they give up. As Tiger Woods returns to golf, Jonah Lehrer looks at the nature of competition. ...

According to a paper by Jennifer Brown, an applied macroeconomist at the Kellogg School of Management at Northwestern University, Mr. Woods is such a dominating golfer that his presence in a tournament can make everyone else play significantly worse. Because his competitors expect him to win, they end up losing; success becomes a self-fulfilling prophecy.

Ms. Brown argues that the superstar effect is not just relevant on the golf course. Instead, she suggests that the presence of superstars can be "de-motivating" in a wide variety of competitions, from the sales office to the law firm. "Most people assume that competing against an elite performer makes everyone else step up their game and perform better," Ms. Brown says. "But the Tiger Woods data demonstrate that the opposite can also occur. It doesn't matter if the superstar is an athlete or a corporate vice president. After all, why should we invest a lot of energy in a tournament that we're probably going to lose?" ...

Ms. Brown cites the competition among newly hired associates at a law firm as another example of a nonlinear incentive structure. "The lawyers know that most of them won't be retained," she says. "They either win the competition, or they're let go." The problem with such competitions is that when a superstar is present—when one of the legal associates is perceived as the clear favorite—every other lawyer is less likely to exert maximum effort. Because we assume we're going to lose, we decide to cut our losses, which leads to an overall decrease in employee effort. The cutthroat competition made people less competitive.

The same phenomenon seems to also affect students taking the SAT. In a paper released last year, researchers from the University of Michigan and the University of Haifa compared average SAT scores with the average number of students in test-taking venues in all 50 states, and found that students who took the SAT in larger groups did worse. They concluded that the mere knowledge of their competitors—the sight of all of those other students scratching in their answers in the same room—decreased motivation.

The paper is Quitters Never Win: The (Adverse) Incentive E¤ects of Competing with Superstars.  Here is the abstract:

Managers use internal competition to motivate worker e¤ort, yet economic theory suggests that the benefits of competition may depend critically on workers' relative abilities -- large di¤erences in skill may reduce competitors' efforts. This paper uses panel data from professional golfers and finds that the presence of a superstar in a rank-order tournament is associated with lower competitor performance. On average, higher-skill PGA golfers' first-round scores are approximately 0.2 strokes higher when Tiger Woods participates, relative to when Woods is absent. The overall superstar e¤ect for tournaments is approximately 0.8 strokes. The adverse superstar effect increases when Woods is playing well and disappears during Woods's weaker periods. There is no evidence that reduced performance is due to "riskier" play.


What is the effect of superstars on their law faculty colleagues?  In light of this morning's post, what is the impact on a law faculty of having one of the most highly cited (Erwin Chemerinsky (UC-Irvine), Richard Epstein (Chicago/NYU), Ronald Dworkin (NYU), Eric Posner (Chicago), Mark Tushnet (Harvard), Laurence Tribe (Harvard)) or most downloaded (Lucian Bebchuck (Harvard), Dan Solove (George Washington),  Bernard Black (Northwestern), Cass Sunstein (Harvard), Mark Lemly (Stanford), William Landes (Chicago)) law professors as a colleague?

Is there a "superstar effect" in the tax faculty world?  What is the impact on a tax faculty of having one of the most highly cited (Louis Kaplow (Harvard), Michael Gratez (Columbia), Dan Shaviro (NYU), David Weisbach (Chicago), Edward McCaffery (USC), Reuven Avi-Yonah (Michigan)) or most downloaded (Louis Kaplow (Harvard), Reuven Avi-Yonah (Michigan), Vic Fleischer (Colorado). James Hines (Michigan), Chris Sanchirico (Penn), Dennis Ventry (UC-Davis)) tax professors as a colleague?

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There is no superstar effect in the tax faculty world if you do not agree that being the most downloaded or most cited is the sole measure of being a superstar. Golf and law firms are competitions: When Tiger Woods wins, other people lose. When one associate is a star, others know they will get fired. But being on a law faculty is mostly not a zero-sum game. A brilliant and influential colleague can improve conversations, offer insights on papers, draw other tax scholars to the school, and so forth. And if he (no women on those lists) does none of those things? Well, then he's not much of a superstar, even if his papers are downloaded a lot.

Posted by: Tax Prof | Apr 5, 2010 3:43:47 PM

Taxing times for underachievers? Lucky that though dealing with the law, too much citing does not get one in jail as a tax prof super star. Just found out that you areamong the highest ranking economics sites in Brian gongol's EconDrectory - congratulations!

Posted by: CrisisMaven | Apr 5, 2010 7:17:48 PM

The superstar effect is nothing more than a Freakonomics fad. Once seen for what it is, or when the newest fad comes along, it will soon be forgotten.

I summered in a small law firm that hired 4 summer associates. As the summer moved along, it was clear that all of us would not be hired back (comments like "You're taking all my work and now I have nothing to do or bill all day long" made to us over lunches with other associates made it clear that the firm was cleverly decreasing associate billable hours, to reduce or eliminate bonuses or raises. This was in the gentrified old days when no one was fired). I'll tell you it was cutthroat, even though 3 of us knew the 4th was getting an offer and there might not be a second one made. (Which she did. They also hired another guy. Me and the other guy went back to the cover letter writing drawing board. Which was so successful that I matriculated to NYU the very next fall).

Maybe millenials don't care a lick and give up easy, but I don't think so for others.

Posted by: tax guy | Apr 5, 2010 7:49:29 PM

"What is the effect of superstars on their law faculty colleagues?"

The colleagues are left to do the actual work of teaching law students.

The sooner you figure out that legal education is not a competition, the happier you and your students will be. TaxProf's rankings obsession feeds a sickness.

Posted by: Jack Bogdanski | Apr 6, 2010 2:04:19 AM