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The Impact of Group Diversity on Performance and Knowledge Spillover -- An Experiment in a College Classroom

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  • Zeynep Hansen
  • Hideo Owan
  • Jie Pan
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    Abstract

    An important yet under-explored question in the teamwork literature concerns how group characteristics affect productivity. Within a given teamwork setting, it is not obvious how group member diversity affects the performance of the individual and the group. The group may gain from knowledge transfer and sharing while it may be crippled by communication and coordination problems that are prevalent in heterogeneous groups. In this study, we combine class performance data from an undergraduate management class with students%u2019 personal records to explore diversity and knowledge spillover effects. A major advantage of our dataset is the exogenous assignment of groups, which rules out the troublesome yet common self-selection issue in team literature. Our results indicate that male-dominant groups performed worse both in group work and in individually taken exams than female-dominant and equally-mixed gender groups after controlling for other group characteristics. Individual members from a group with more diversity in age and gender scored higher in exams. However, we did not find any significance of a group%u2019s racial composition over group and individual performances. Another novel aspect of this natural experiment is that each group chooses their own group contract form %u2013 members of %u201Cautonomous%u201D groups receive equal grade for their group work while those in "democratic" groups can adopt differentiated point allocation, thus, providing a proper mechanism to punish free riders. Our estimation results show a significant correlation between the choice of a democratic contract and the group and individual performance. To address the endogeneity problem in groups%u2019 contract choices, we use a maximum likelihood treatment effect model and found that the democratic group contract has a positive and significant effect on group performance.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12251.

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    Date of creation: May 2006
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    Handle: RePEc:nbr:nberwo:12251

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    1. Barton H. Hamilton & Jack A. Nickerson & Hideo Owan, 2003. "Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 465-497, June.
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    7. Caroline Hoxby, 2000. "Peer Effects in the Classroom: Learning from Gender and Race Variation," NBER Working Papers 7867, National Bureau of Economic Research, Inc.
    8. Gruenfeld, Deborah H & Mannix, Elizabeth A. & Williams, Katherine Y. & Neale, Margaret A., 1996. "Group Composition and Decision Making: How Member Familiarity and Information Distribution Affect Process and Performance," Organizational Behavior and Human Decision Processes, Elsevier, vol. 67(1), pages 1-15, July.
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    15. Peter Arcidiacono & Jacob L. Vigdor, 2010. "Does The River Spill Over? Estimating The Economic Returns To Attending A Racially Diverse College," Economic Inquiry, Western Economic Association International, vol. 48(3), pages 537-557, 07.
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    Cited by:
    1. Sander Hoogendoorn & Simon C. Parker & Mirjam van Praag, 2012. "Ability Dispersion and Team Performance: A Field Experiment," Tinbergen Institute Discussion Papers 12-130/VII, Tinbergen Institute.
    2. Hessel Oosterbeek & Reyn van Ewijk, 2010. "Gender Peer Effects in University: Evidence from a Randomized Experiment," Tinbergen Institute Discussion Papers 10-113/3, Tinbergen Institute.
    3. Anne Sibert, 2010. "Sexism and the City: Irrational Behaviour, Cognitive Errors and Gender in the Financial Crisis," Open Economies Review, Springer, vol. 21(1), pages 163-166, February.
    4. repec:dgr:uvatin:2012130 is not listed on IDEAS
    5. Sander Hoogendoorn & Simon C. Parker & Mirjam van Praag, 2014. "Ability Dispersion and Team Performance," Tinbergen Institute Discussion Papers 14-053/VII, Tinbergen Institute.
    6. repec:dgr:uvatin:2011074 is not listed on IDEAS
    7. Ficano, Carlena Cochi, 2012. "Peer effects in college academic outcomes – Gender matters!," Economics of Education Review, Elsevier, vol. 31(6), pages 1102-1115.
    8. repec:dgr:uvatin:2012068 is not listed on IDEAS

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