How Much Is Your Reputation Really Worth?

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The ancient Roman philosopher Publilius Syrus opined, “A good reputation is more valuable than money.” New research appearing this month in Management Science suggests these words may be as true today as they were 2,000 years ago.

Researchers David Waguespack and Robert Salomon examined whether “reputationally-privileged” athletes—those who had been successful in previous competitions, or came from countries with a track record of athletic excellence—were more likely to succeed at the Olympic Games than lesser-known athletes.

Their findings have implications inside and outside of the sports world.

They showed that “reputationally-privileged” athletes were more likely to succeed, but only in certain sports. Salomon explained:

“Where reputation matters most are those sports in which the outcomes are based more on subjective criteria—beauty, grace, artistry (like gymnastics and figure skating)—versus those where the outcomes rely on more objective indicators, such as accumulated points (like basketball, baseball, soccer, etc.). In the latter set, judges (referees) matter, but they exert less of an influence through interpretation than in the former.”

Sports with more subjective grading criteria tend to favor “reputationally-privileged” athletes. Having a reputation for success does not make athletes better in any objective sense. “Judges rely on the reputation of certain countries (or athletes) as a crutch to score performances more than they probably should,” Salomon said.

Consider Olympic boxing. In their analysis, Waguespack and Salomon showed that “reputationally-privileged” boxers were more likely to win by points (a subjective measure of performance) but were no more likely to win by knockout (an objective measure of performance). “The nice thing about the boxing context is that it has elements of objective outcomes (knockouts) and elements of subjective outcomes (win on points). And so it was a nice context in which to flesh out the theory and confirm our results in a single context,” Salomon said.

The results of Waguespack and Salomon’s study raise a number of important questions, such as whether competitions graded on subjectivity can be made more fair. Boxing, for instance, has initiated electronic scoring in an effort to reduce referee bias. Waguespack, however, is skeptical that these measures will be successful in addressing the underlying problem. “Efforts to make aesthetic assessments more objective may have unintended consequences,” he said. “For instance, many boxing insiders think that electronic scoring has reduced the incentives for boxers to attempt powerful hits, and has reduced the incentive for judges to behave independently.”

Salomon added, “It might be tempting to think that by simply computerizing everything we would eliminate the kinds of bias identified in this study. However, certain solutions come with unintended consequences and we must think carefully about those consequences. As Thurgood Marshall once said, ‘Bad cases lead to bad law.’”

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On a broader level, what might this mean for the importance of reputation in our own lives?

First, it suggests that there are contexts in life in which reputation matters more than others. For example, careers in which success is evaluated in a more objective fashion (sales, business, etc.) may be less influenced by reputation than careers in which success is evaluated more subjectively (music, acting, fine arts, etc.).

Depending on how much priority you place on maintaining your own reputation, you may want to plan accordingly.

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References

Waguespack, D. M., & Salomon, R. (2015). Quality, Subjectivity, and Sustained Superior Performance at the Olympic Games. Management Science.