The costs and benefits of coordinating with a different group

Paul Grout, Sebastien Mitraille and Silvia Sonderegger

Journal of Economic Theory, 2015, vol. 160, issue C, 517-535

Abstract: We consider a setup where agents care about i) taking actions that are close to their preferences, and ii) coordinating with others. The preferences of agents in the same group are drawn from the same distribution. Each individual is exogenously matched with other agents randomly selected from the population. Starting from an environment where everyone belongs to the same group, we show that introducing agents from a different group (whose preferences are uncorrelated with those of each of the incumbents) generates costs but may also (surprisingly) generate benefits in the form of enhanced coordination.

Keywords: Diversity; Coordination; Social interactions; Value of information; Complementarities (search for similar items in EconPapers)
JEL-codes: C72 D82 Z1 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:160:y:2015:i:c:p:517-535

DOI: 10.1016/j.jet.2015.09.006

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