First in village or second in Rome?

Ettore Damiano (), Hao Li and Wing Suen

Microeconomics.ca working papers from Vancouver School of Economics

Abstract: Though individuals prefer to join groups with high quality peers, there are also advantages from being high up in the pecking order within a group. We show that sorting of agents in this environment results in an overlapping interval structure in the type space. Segregation and mixing coexist in a stable equilibrium. A greater degree of egalitarianism within organizations leads to greater segregation across organizations. Since competition is most intense for agents with intermediate talent, effective personnel policies to attract talent differ systematically between high-quality and low-quality organizations. When transfers are possible our stable equilibrium corresponds to a competitive equilibrium but entails too little segregation compared to the efficient assignment.

JEL-codes: C78 D83 M50 (search for similar items in EconPapers)
Pages: 0 pages
Date: 2005-01-25, Revised 2005-01-26
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: FIRST IN VILLAGE OR SECOND IN ROME? (2010)
Working Paper: First in Village or Second in Rome (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:pmicro:damiano-05-01-25-10-14-13

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