On the issue of character, philosopher John Doris argues persuasively that there's surprisingly little empirical support for the idea of character. (see Lack of Character: Personality and Moral Behavior').

The belief that success and failure are due to stable traits is one of the things that continues to disadvantage women.

Instead of looking at the environment, defenders of the status quo point to the historical record of women's achievement in art, science, war, political leadership (etc) and conclude that women lack the traits necessary for performance. Similar arguments have been made about blacks and other groups.

For members of dominant groups who favor hierarchies of power and status, trait theories are advantageous.

Not only to do they enhance self-esteem (“I'm successful therefore I must be intelligent and virtuous”) and justify inequalities, but if you can persuade subordinate groups to buy into the theory, they'll be much less of threat.

The market should reward results. By my argument, peers should reward sincere efforts/intentions. These are separate facets of life.

Out on the hypothetical limb, rewarding character may provide incentive to maintain a good character perception, but it may also function to disincentivise reformation of bad character reputations and demoralize poor signallers who may have excellent, but unnoticed, characters.

Rewarding good results provides a broader opportunity for reward among all peers, but still demoralizes those who are poor at judging how to obtain good results or good visible results.

Rewarding good efforts, or even merely sincere-appearing effort, broadens it even further and also largely disconnects reward from aptitude. The poor-character peer can still gain rewards regardless of reputation, and he will only receive those rewards while he is perceived as making sincere efforts. More importantly, the inept peer can gain rewards, even in the face of negative results. Only through selt-improvement can he continue to be perceived as sincere, but once he is rewarded he is already enrolled in the rewards system, as opposed to being completely excluded from it for his own self-aware limitations.

This certainly smacks of dumbing down peer rewards for good results, but as you pointed out, broader participation in the system yields a better system and broader lack of participation or even counter-participation undermines the efforts of those in the system. Does the incorporation of poor reputations or poor performers actually harm the system's efforts overall?

Horwitz talks about the danger of the “myth of merit.” I recall Hayek saying somewhere that “the market does not reward intentions, it rewards results.”

Ooh, but the original Hanson comment suggested praising people for RESULTS. As we all know, a parent can spend lots of time with his or her kids, and things can still not work out. So while Wilkinson thinks that we should say, with mingled admiration and regret, “Larry is a good father, but his son grew up bad,” Hanson appears to think we should say dismissively, “Larry is a loser, his son grew up bad.”