Does Reducing Communication Barriers Promote Diversity?
53 Pages Posted: 25 Jul 2022 Last revised: 5 Jun 2023
Date Written: June 5, 2023
We study optimal diversity (in expertise) in hiring decisions. The key trade-off is that, while hiring a more diverse team enlarges the team's pool of knowledge, it may also discourage communication between the hired experts. Equilibrium diversity balances this trade-off. We find that a gradual reduction in communication costs can lower diversity, but a big reduction in communication costs will eventually foster diversity.
Keywords: diversity, communication
JEL Classification: D82, D83, M14
Suggested Citation: Suggested Citation
Dong, Miaomiao and Mayskaya, Tatiana, Does Reducing Communication Barriers Promote Diversity? (June 5, 2023). Available at SSRN: https://ssrn.com/abstract=4164162 or http://dx.doi.org/10.2139/ssrn.4164162
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