(In progress - incomplete)

• Lots of people at Stanford and elsewhere think they can have it all: (i) have a high-status prestigious job (ii) do good for the world (iii) make a lot of money (the third condition is not always the case)
• One conclusion from this piece is that no, you can’t have it all; at least under certain conditions (that I think are reasonable at least for a decent portion of jobs)

Definition 1: impactful choices

1. Person A has said to have made an impactful choice if and only if the choice produces a much greater degree of social benefit compared to a world in which person A makes an alternate choice. (a. the average alternative for others with person A’s options b. the next most impactful choice)
   • An immediate consequence of this definition is that if Person A makes choice X, the choice has no impact if a different Person B would have made choice X in a world in which Person A does not choose X.
     • Note: this only looks at 2nd order effects. We could also look at 3rd order effectss and consider which choice Person B is abandoning in order to pursue option X… and continue this ad infinitum… though eventually one of the following stopping conditions is satisfied:
       1. We run out of people!
       2. We arrive at an uncompetitive position (Defined below) where multiple people can make the same choice
          • Note that in either of the above cases, we’re unlikely to arrive at a contradiction of our paradox because 1. the last person in line to make a decision was likely also the least qualified person (small potential impact) or 2. qualified prestige-seeking people will not apply to uncompetitive positions
   • perhaps this should be framed in terms of outcomes not choices

Definition 2: Prestigious choices

A choice is said to be prestigious if lots of other people also want to achieve the outcome associated with the choice.

• Necessary consequence: prestigious outcomes are associated with competitive choices in the sense that many people (i) want the ability to make such a choice (ii) want the outcome associated with the choice.

Definition 3: Competitive choices

1. X is a competitive choice implies that if Person A with the option to choose X does not choose X, then there exists a person B who will choose X.

Implication 1: Impactful choices are not prestigious

• Consequence: It follows from the above three definitions that an impactful choice is not a prestigious choice! I.e. impactful → not competitive → not prestigious which is equivalent to prestigious → competitive → not impactful!
  • Note: Not prestigious does not necessarily imply impactful

Aside 1: Programs that reallocate prestige can produce optimal social outcomes

• This is a big problem for college students seeking impact and prestige! Indicates a need to create programs that create prestige for currently non-prestigious positions that are impactful
  • Interestingly, once the prestige is created and the program becomes competitive, participation is no longer impactful
  • Indeed, the social planner’s goal should be to ensure the marginal social impact of all choices is equal. In other words, there are no socially beneficial reallocations of people to different choices! To state it plainly, there are no settings, where we have a person choosing A and we would rather have them choosing B.

Objections

Objection 1: The price signal

• In theory, when there is a scarcity of workers for a particular task, the price of labor will increase holding all else equal. Furthermore, as the impact of a job increases, the price of labor also increases (marginal revenue product is higher which increases demand). So why doesn’t the price signal solve the problem of people allocation?
  1. Social benefits that are not captured by producers (e.g. positive externalities)
     • Is there literature quantifying this?
  2. Rent-seeking + other monopoly tactics which is probably most present in finance (this is probably much smaller than the social benefits argument?)
     • Is there literature quantifying this?

Objection 2: Unique people

• If there is sufficient variance among the skillsets of people AND this variation is enough to produce meaningful difference in actual on-the-job capabilities, then it can be argued that a given individual matched to a job is not perfectly substitutable. Some objections to this argument are as follows:
  1. Even if some jobs/people exhibit this property, many do not. Especially jobs where tasks are sufficiently general that past a certain level of competence, job-seekers are not substantially different.
  2. More competitive jobs have more applicants by definition. Thus, the likelihood of that there exists at least one other person who is an effective replacement to a job receiver increases due to the deeper pool. (Courtesy of Jason Zhao)