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Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-51539

Salmon, Timothy C; Weber, Roberto A (2011). Maintaining Efficiency While Integrating Entrants From Lower-Performing Environments: An Experimental Study. Working paper series / Department of Economics No. 35, University of Zurich.



Efficient growth often requires the integration of individuals from lower-performing groups, fi*rms, or societies into higher-performing ones. Such integration may be difficult without facilitating interventions or restrictions. We explore, using a laboratory experiment, the e*ffectiveness of two regularly-employed entry restrictions: entry quotas and entry exams. We use a coordination game with Pareto-ranked equilibria, in which we allow an efficiently-coordinated group and an inefficiently-coordinated one to arise endogenously. We then allow individuals to move from the low-performing group to the high-performing one. We vary whether such movement is unrestricted, is limited to one entrant per period, or is subject to passing an entry exam. We *find both kinds of restrictions improve the efficient integration of entrants, but that there is no additional bene*fit obtained by their combination. The restrictions lead to improved behavior among entrants, but they have a stronger influence on the maintenance of good behavior among incumbents in the high-performing group.

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
DDC:330 Economics
JEL Classification:C72, C92, M12
Date:October 2011
Deposited On:25 Nov 2011 10:13
Last Modified:20 Oct 2012 18:15
Series Name:Working paper series / Department of Economics
Official URL:http://www.econ.uzh.ch/wp.html

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