Learning by helping: a bounded rationality model of mentoring

Within an organization, a bounded rational principal organizes a promotion contest based on a sequence of rests regarding candidates' relative perform ances. We assume the principal to suffer from limited ability ru rank the p erformances, only identifying the best in each test. Furthermore, he satisf ies the expected profit from promotion, designing the contest such that exp ected gains do not decrease with the information generated by additional te sts. Then, mentoring is shown to improve the information about candidates' ability when the principal offers help to the current best candidate provid ed by a manager promoted after a similar contest. (C) 2001 Elsevier Science B.V. All rights reserved.