Diversity in Teams

24 Pages Posted: 31 Jan 2023 Last revised: 13 Apr 2023

See all articles by Miaomiao Dong

Miaomiao Dong

Pennsylvania State University, Department of Economics

Tatiana Mayskaya

National Research University Higher School of Economics - International College of Economics and Finance; National Research University Higher School of Economics - Faculty of Economics

Vladimir Smirnov

The University of Sydney - School of Economics

Olivia Taylor

The University of Sydney - School of Economics

Andrew Wait

University of Sydney

Date Written: February 12, 2023

Abstract

What is the optimal diversity of expertise in a team? Prat (2002) shows that a supermodular production function (which describes strategic complementarity between individual outputs) implies a lower optimal diversity than a submodular function (which corresponds to strategic substitutability). We investigate how optimal diversity changes as the production function adjusts continuously from a supermodular to a submodular function. The Utilitarian objective gives an intuitive monotonic relationship. However, the Rawlsian objective, an objective that optimizes the worst scenario, generates a non-monotonic relationship: optimal diversity may fall with increasing weighting on the submodular component of the production function.

Keywords: Cognitive Diversity, Supermodular and Submodular Functions, Rawlsian Objective

JEL Classification: L23, M14

Suggested Citation

Dong, Miaomiao and Mayskaya, Tatiana and Smirnov, Vladimir and Taylor, Olivia and Wait, Andrew, Diversity in Teams (February 12, 2023). Available at SSRN: https://ssrn.com/abstract=4343715 or http://dx.doi.org/10.2139/ssrn.4343715

Miaomiao Dong

Pennsylvania State University, Department of Economics ( email )

University Park, PA
United States

Tatiana Mayskaya (Contact Author)

National Research University Higher School of Economics - International College of Economics and Finance ( email )

Pokrovski Bulvar 11, Korpus Zh, Office 715
Moscow, 109028
Russia

National Research University Higher School of Economics - Faculty of Economics ( email )

Shabolovka 26
Moscow, 119049
Russia

Vladimir Smirnov

The University of Sydney - School of Economics ( email )

Rm 370 Merewether (H04)
The University of Sydney
Sydney, NSW 2006 2008
Australia

Olivia Taylor

The University of Sydney - School of Economics ( email )

Andrew Wait

University of Sydney ( email )

School of Economics
University of Sydney, NSW 2006
Australia
+61-2-9351-3060 (Phone)
+61-2-9351-4341 (Fax)

HOME PAGE: http://sydney.edu.au/arts/economics/

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