Yes, the reward system is very important in choosing the right strategy. If the first place gives you gold, and all other places give you nothing, use positive selection. If the last places gives you problem, and all other places give you nothing, use negative selected. Other point of view: if being average is good, play safe by using negative selection; if being average is bad, aim for greatness (and accept a certain risk of failure) by using positive selection.

So the question is what exactly do we want in elite colleges or academia (examples from the article)? I guess for elite colleges it is better to play safe. If your students are above average and everyone knows it, they don't have to be exceptional -- your diploma will help them get a decent job, which is why they pay you. A few bad apples could ruin your marketing. With academia, for an average university it is probably better to have "safe" professors who do their jobs, get grants, and don't cause scandals; even if the price is having less Nobel-price winners.