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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

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.

Suggested Citation

  • Zeynep Hansen & Hideo Owan & Jie Pan, 2006. "The Impact of Group Diversity on Performance and Knowledge Spillover -- An Experiment in a College Classroom," NBER Working Papers 12251, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12251
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    Cited by:

    1. Hoogendoorn, Sander M. & Parker, Simon C. & van Praag, Mirjam C., 2012. "Ability Dispersion and Team Performance: A Field Experiment," IZA Discussion Papers 7044, Institute of Labor Economics (IZA).
    2. Hoogendoorn, Sander M. & van Praag, Mirjam C., 2012. "Ethnic Diversity and Team Performance: A Field Experiment," IZA Discussion Papers 6731, Institute of Labor Economics (IZA).
    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. Oosterbeek, Hessel & van Ewijk, Reyn, 2014. "Gender peer effects in university: Evidence from a randomized experiment," Economics of Education Review, Elsevier, vol. 38(C), pages 51-63.
    5. Ozturk, Ayse & Cavusgil, S. Tamer, 2019. "Global convergence of consumer spending: Conceptualization and propositions," International Business Review, Elsevier, vol. 28(2), pages 294-304.
    6. Sander Hoogendoorn & Simon C. Parker & Mirjam van Praag, 2014. "Ability Dispersion and Team Performance," Tinbergen Institute Discussion Papers 14-053/VII, Tinbergen Institute.
    7. Victor Lavy & Analia Schlosser, 2011. "Mechanisms and Impacts of Gender Peer Effects at School," American Economic Journal: Applied Economics, American Economic Association, vol. 3(2), pages 1-33, April.
    8. Sander Hoogendoorn & Hessel Oosterbeek & Mirjam van Praag, 2013. "The Impact of Gender Diversity on the Performance of Business Teams: Evidence from a Field Experiment," Management Science, INFORMS, vol. 59(7), pages 1514-1528, July.
    9. Proud, S., 2014. "Girl Power? An Analysis Of Peer Effects Using Exogenous Changes In The Gender Make-Up Of The Peer Group," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 14(3), pages 5-18.
    10. Ficano, Carlena Cochi, 2012. "Peer effects in college academic outcomes – Gender matters!," Economics of Education Review, Elsevier, vol. 31(6), pages 1102-1115.
    11. Hsieh, Chih-Sheng & Lin, Xu, 2017. "Gender and racial peer effects with endogenous network formation," Regional Science and Urban Economics, Elsevier, vol. 67(C), pages 135-147.
    12. Rosendahl Huber, Laura & Sloof, Randolph & van Praag, Mirjam C., 2014. "Jacks-of-All-Trades? The Effect of Balanced Skills on Team Performance," IZA Discussion Papers 8237, Institute of Labor Economics (IZA).

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    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • I2 - Health, Education, and Welfare - - Education

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