"Should have been hired" Prizes

By Larks @ 2022-01-19T14:19 (+38)

Retrospective Employment Bounties

Funding socially beneficial work in retrospect is an idea that has been frequently discussed (e.g. here) but has had a variety of problems in practice, including the difficulty in concretely identifying ahead of time what will be in retrospect eligible.

A possible solution to this would be to exploit an existing area where such organisations already make such deliberations: hiring. At present orgs evaluate researchers, estimating their expected research contributions to that organisation’s agenda. If this estimate is high, the researcher is hired. If it is low, the researcher is rejected.

Sometimes these estimates are wrong, however, and sometimes the candidate might have good reason to believe this. Perhaps he knows he underperformed his true potential at the interview, or struggled to explain his ideas, or simply thinks the interviewers were mistaken about some crucial consideration. In these cases it might be good if the researcher was incentivised to work on the research anyway, as if he had been hired.

This could be achieved if the organisation credibly promised to pay rejected applicants in retrospect if their work turned out to be sufficiently good that they should have been hired. In order to account for risk, the organisation might offer a multiple of the salary + benefits they would have offered. For example, if the organisation thinks their marginal hire (that they actually hired) has a 50% chance of producing work of quality X, they should be willing to pay 2x compensation for any rejected candidate who nonetheless produces quality X work.

The organisation could additionally hire the researcher at this point, but this is not a necessary component. Additionally, this system could be combined into a broader Impact Certificates program - it would essentially be a commitment to purchase certificates at a certain price - but can stand on its own. Some mechanism may be required to ensure that multiple organisations do not fund the same work.

Advantages of this approach:

• Incentivise additional work
  • The prospect of compensation (and vindication!) may induce additional research effort on useful topics.
• Guide research
  • Independent researchers will have some sense of what to work on: instead of ‘produce valuable things’, they have the slightly more concrete ‘things this organisations thinks are valuable’.
• Pay for Performance
  • Only research successes require payment.
• Existing Evaluation Criteria
  • Organisations already make hiring decisions, so there is relatively little novel evaluative work required.
• Save overhead
  • If rejected candidates can produce good work independently, you are relieved of the costs of managing them.
• Fail gracefully
  • If no organisations adopt this policy, or no spurned applicants pursue it, little is lost.

Disadvantages of this approach:

• Waste Time
  • Low quality, correctly rejected candidates might waste their time on a quixotic quest for vindication.
• Limited Scope
  • This can only induce counterfactual effort from rejected candidates, a relatively small pool.
  • If organisations are good at hiring, this may be a weak pool.
• Dissatisfaction
  • Being rejected from such a prize could add insult to the injury of the initial rejection.
  • Some people might disagree with the retrospective evaluation and feel cheated.
• Risk aversion / diminishing marginal utility
  • A guarantee of Y dollars is more valuable than a 50% chance of 2*Y, so this produces less utility for researchers than if they had been hired (though this was not on the table as they were rejected).
• Duplication of effort
  • Multiple researchers may require compensation for the same insights in a way that could be avoided if the organisation was directly allocating their labour.
• Financial planning
  • Uncertainty about how many such prizes will be earned could make it harder for an organisation to predict their future expenditure. But I would expect that, if this is a good idea, donors could be found to underwrite the expense.

What next?

Having put this idea out there I have little intention of promoting it further, but would be happy to discuss or help any organisations that found it interesting.