The Hiring Problem and Pre-Screening Bias
In HR, the law prohibits discrimination based on race, gender, age and sexual orientation. However, this is not actually happening in every hiring, because by the time the candidates are formally entering interviews, many screenings are already done. These pre-screenings can be most damaging by excluding some very qualified candidates — based on criteria other than meritocracy, such as age, sex or sexual orientation. The new technology that makes the pre-screening possible entirely online does not help to change the old problem in the old days when everything is done by paper and pen. This is a perfect example preinstitutions because the prescreening happens before interviews. Of course, bias does not just arise from prescreening, as HR employees can game the system before, during or after interviews.
Laws Are Neutral
Another interesting case came from the TV drama of Good Wife, in one of the episodes the female lead character, Diane Lockhart, said something deep and thorough: The law is neutral! It has to be neutral in order to maintain fairness. But if that is the case, that means anyone can use the law to defend themselves or do themselves a favor by leveraging the laws.
The Joe Biden Turnaround
Read this report from Washington Post and you would understand why the theory of preinstitutions goes well with game theory. In a game each player relies not just on his/her own resources but also public ones that are essentially free to grab. These public resources can be created by the opponents, third parties and/or natural endowments. Joe Biden won big in the so called “Super Tuesday” of 2020 not because his own money and efforts invested in the 14 states that turned out to be crucial for his campaign turnaround, but because other democratic candidates felt a threat by Bernie Sanders the socialist candidate and the need for a coalition of middle grounds. Trump also assisted big time — by mobilizing suburbans determined to pick someone who can defeat Trump. Biden’s landslide winning in South Carolina has significantly boosted his score of electability, thus rallying many voters waiting for someone like him.
Incomplete Contracts and Preinstitutions
Preinstitutions are all about variation just as institutions are all about regularities. It just came to me this morning that the so called incomplete contracts, or the difficulties in drawing a complete contract that covers all contingencies, lend support to my theory of preinstitutions. We cannot have a cover-all contract not only because of the hold-up problem, where parties do not want to invest more in pre-commitments because they fear those commitments may hurt them later on, but also because of incomplete information at the time of drafting and signing the contract, even when parties have all the goodwill to coordinate with each other.