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Division of labor and the organization of knowledge in production: A laboratory experiment

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  • Klockmann, Victor
  • von Schenk, Alicia
  • von Siemens, Ferdinand A.

Abstract

Following Garicano (2000), we consider groups whose members decide what knowledge to acquire and how to use this knowledge in production. If efficient production requires common knowledge, all group members should become workers and acquire common knowledge. But if efficient production requires diverse knowledge, one group member should become manager, acquire rare knowledge, and stand ready to help the other workers. In our laboratory experiment, we find that most groups eventually manage to coordinate on an efficient division of labor. Still, we find substantial adoption frictions. Coordination takes time, and some groups coordinate on an inefficient division of labor, probably because they do not know what specialization of knowledge is most efficient.

Suggested Citation

  • Klockmann, Victor & von Schenk, Alicia & von Siemens, Ferdinand A., 2021. "Division of labor and the organization of knowledge in production: A laboratory experiment," Games and Economic Behavior, Elsevier, vol. 130(C), pages 196-210.
    • Handle: RePEc:eee:gamebe:v:130:y:2021:i:c:p:196-210
    DOI: 10.1016/j.geb.2021.08.002
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    References listed on IDEAS

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    More about this item

    Keywords

    Knowledge; Division of labor; Organizational economics;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D20 - Microeconomics - - Production and Organizations - - - General
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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