The Power of Diversity Over Large Solution Spaces
Dept. Management, Università Ca' Foscari Venezia
Bielefeld University - Center for Mathematical Economics
September 26, 2011
Department of Management, Università Ca' Foscari Venezia Working Paper No. 1/2011
We consider a team of agents with limited problem-solving ability facing a disjunctive task over a large solution space. We provide sufficient conditions for the following four statements. First, two heads are better than one: a team of two agents will solve the problem even if neither agent alone would be able to. Second, teaming up does not guarantee success: if the agents are not sufficiently creative, even a team of arbitrary size may fail to solve the problem. Third, "defendit numerus": when the agent's problem-solving ability is adversely affected by the complexity of the solution space, the solution of the problem requires only a mild increase in the size of the team. Fourth, groupthink impairs the power of diversity: if agents' abilities are positively correlated, a larger team is necessary to solve the problem.
Number of Pages in PDF File: 26
Keywords: Problem-solving, Bounded rationality, Theory of teams, Groupthink
JEL Classification: D23, D71, C65
Date posted: April 11, 2012
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