Challenging Conformity: A Case for Diversity

Willemien Kets and Alvaro Sandroni

MPRA Paper from University Library of Munich, Germany

Abstract: Why do diverse groups outperform homogeneous groups in some settings, but not in others? We show that while diverse groups experience more frictions than homogeneous ones, they are also less conformist. Homogeneous groups minimize the risk of miscoordination, but they may get stuck in an inefficient equilibrium. Diverse groups may fail to coordinate, but if they do, they tend to attain efficiency. This fundamental tradeoff determines how the optimal level of diversity varies with social and economic factors. When it is vitally important to avoid miscoordination, homogeneous groups are optimal. However, when it is critical to implement new and efficient practices, diverse groups perform better.

Keywords: Diversity; conformity; coordination; introspection; Theory of Mind (search for similar items in EconPapers)
JEL-codes: C72 D20 D80 (search for similar items in EconPapers)
Date: 2015-11-15
New Economics Papers: this item is included in nep-cbe and nep-evo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:68166

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