Maintaining Efficiency while Integrating Entrants from Lower Performing Groups

An Experimental Study

Bibliographic Data

ID9707158
AuthorsTimothy C Salmon (Southern Methodist University), Roberto A Weber (0000-0001-8133-8131, University of Zurich)
Year2017
Volume127
Issue600
Pages417-444
Publication date2017-03-01
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/ecoj.12308
OpenAlexW3125661945
LanguageEN
Citations received3
References cited26

Efficiently growing a group or firm often requires integration of individuals from lower-performing entities. We explore the effectiveness of two policies intended to facilitate such integration, using a laboratory experiment that models production as a coordination game with Pareto-ranked equilibria. We initially create an efficient group and an inefficient one. We then allow individuals to move into the high-performing group and vary by treatment whether movement is unrestricted, limited to one entrant per period, or subject to an entry exam. We include two additional treatments that combine the two restrictions in different ways to help understand why the institutions are effective in maintaining coordination. We find that both restrictions work to maintain efficient coordination but they are effective for different reasons

Business · Coordination game · Economics · Group (periodic table) · Industrial organization · Machine learning · Microeconomics · Multi-objective optimization · Operations management · Pareto optimal · Pareto principle · Production (economics) · Work (physics) · Auction Theory and Applications · Computer Science · Engineering · Experimental Behavioral Economics Studies · Merger and Competition Analysis

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