Matthew Effect: The Rich Actually Get Richer
“Every once in a while you hear an expert that says team chemistry is overrated. You just write that person off.” – Tony La Russa
MENTAL MODEL
The Matthew effect is the tendency for individuals to accrue success in proportion to their initial level of popularity, friends, and wealth. The rich get richer. The poor get poorer. It may be explained by preferential attachment: credit and wealth is distributed among individuals according to how much they already have. The net effect is it is increasingly difficult for low ranked individuals to improve and increasingly easy for high rank individuals since they have more opportunities. Matthew effect pervades every field associated with status and wealth: business, science, relationships.
An instance is how eminent scientists get more attention than comparatively unknown researchers. This is independent of the work done. Credit is given to the famous researcher. A prize is almost always granted to the most senior scientist involved in a project, even if all the work was done by a grad student. Download counts or bestseller lists for books and music have the same effect on consumers. In education, new readers who experience early successes in acquiring reading skill cascade into later successes as the learner grows, and the opposite resulting in lifelong problems in development. This is because children who fall behind in reading read less. Reading less creates difficulty in most other subjects since it is a crucial part of learning. In this way they fall behind even further in school. Their drop out rates skyrocket. Anti-social behavior escalates.
The Matthew effect are how the rich get very rich. The wealthy capitalize on their existing success and become more affluent. Wealth opens many doors and moneymaking prospects. These opportunities spell out more prosperity for the ones already wealthy, and so the spiral goes. But it does not mean that just because we are born rich we get even wealthier. In fact, this is rare, and there has to be: a strong desire to become wealthier, a professional agenda that translates into wealth, a solid understanding of the people that can help us achieve that plan, and a recognition of how our success can connect with the people who provide us that wealth. Put differently, the Matthew effect can be leveraged.
Real-world examples of the Matthew effect:
Academic research: a young scientist publishes a highly cited paper. They are more likely to receive invitations to speak at conferences, secure further funding, and attract collaborators. This forms an upwards spiral, where their reputation begins to and continues to grow, while equally talented peers might struggle for recognition;
Business: a startup secures early venture capital funding due to an innovative product. The capital and credibility enable rapid growth. Markets are penetrated. Stronger advertising campaigns are put forth. This makes it increasingly hard for competitors with similar ideas to catch up;
Wealth accumulation: an individual inherits wealth or achieves early financial success. With capital to invest, they can access more opportunities, compound their finances over time, and widen the gap between themselves and those less fortunate even further;
Media: a musician, author, or actor experiences early success. This initial prosperity gathers media attention. Resulting in press coverages and larger audiences. Which mean more endorsements and higher revenue streams. All of these elements cement their status in the industry. They are set. Literally.
How you might employ the Matthew effect: (1) try to spot and leverage the conditions that provide an initial boost in any system, be it personal development, business, or education, reinforcing early wins and building upon them later; (2) be wary of inequality, knowing that systems reinforce existing advantages; (3) cultivate relationships and networks starting as early as possible, as this acts as a web of opportunity that can amplify your success and be a sort of launchpad; (4) when managing teams, limit the Matthew effect by implementing policies that distribute resources and opportunities as evenly and fairly as possible; (5) look for reinforcing loops where success breeds more success, and examine whether these loops are beneficial or contribute to systemic flaws—monitor if, say, a high-performing team is constantly rewarded disproportionately, assessing whether this is causing a ripple effect in the firm.