The role of information aggregation within firms has long been recognized. We analyze the optimal allocation of differentially informed agents to different firms when those firms are in competition. Will the well informed match with those who are well informed or will they mix with the less informed? This is important because it provides a rationale for the observed worker composition of firms. We find that in equilibrium, the allocation consists of maximally diversifying the work force within the firm, while minimizing the informational difference between firms. Configuring diversely informed teams is the most informative. The value of information is submodular in types, and this allocation is a generalization of negative assortative matching (NAM) in one-to-one matching to a multi-agent team setting, team-NAM. We analyze the allocation in the presence of endogenous firm size, heterogeneity in productivity, and under correlation of the agents' information.
|Date of creation:||2012|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bulent Guler & Fatih Guvenen & Giovanni L. Violante, 2009.
"Joint-Search Theory: New Opportunities and New Frictions,"
NBER Working Papers
15011, National Bureau of Economic Research, Inc.
- Guler, Bulent & Guvenen, Fatih & Violante, Giovanni L., 2012. "Joint-search theory: New opportunities and new frictions," Journal of Monetary Economics, Elsevier, vol. 59(4), pages 352-369.
- Bulent Guler & Fatih Guvenen & Giovanni L. Violante, 2009. "Joint-search theory: new opportunities and new frictions," Staff Report 426, Federal Reserve Bank of Minneapolis.
- Giovanni L. Violante & Fatih Guvenen & Bulent Guler, 2008. "Joint-Search Theory: New Opportunities and New Frictions," 2008 Meeting Papers 856, Society for Economic Dynamics.
- Albrecht, James & Anderson, Axel Z. & Vroman, Susan, 2007.
"Search by Committee,"
IZA Discussion Papers
3137, Institute for the Study of Labor (IZA).
When requesting a correction, please mention this item's handle: RePEc:red:sed012:835. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.