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Maintaining efficiency while integrating entrants from lower-performing groups: an experimental study


Salmon, Timothy C; Weber, Roberto A (2014). Maintaining efficiency while integrating entrants from lower-performing groups: an experimental study. Working paper series / Department of Economics No. 35, University of Zurich.

Abstract

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.

Abstract

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.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C72, C92, M12
Uncontrolled Keywords:Growth, entry, coordination, experiments, Spieltheorie, Kooperatives Spiel, Wirtschaftswachstum, Experiment, Integration
Language:English
Date:July 2014
Deposited On:25 Nov 2011 10:13
Last Modified:10 Jun 2018 04:21
Series Name:Working paper series / Department of Economics
Number of Pages:33
ISSN:1664-7041
Additional Information:Revised version
OA Status:Green
Official URL:http://www.econ.uzh.ch/static/wp/econwp035.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers.php

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