Andrew Wait (University of Sydney); Miaomiao Dong (Pennsylvania State University); Tatiana Mayskaya (HSE University); Vladimir Smirnov (University of Sydney); Olivia Taylor (University of Sydney)
Abstract
We investigate how optimal cognitive diversity depends on the nature of production and the objective employed. When the output of the most productive worker becomes relatively more important, with a utilitarian objective, optimal diversity weakly increases. However, with a Rawlsian objective, which captures the preferences of a public service provider, a regulated firm, or a very risk averse manager, optimal diversity might decrease. Moreover, optimal diversity is weakly higher with the Rawlsian objective than with the utilitarian one, which suggests that high diversity in teams can be achieved by imposing a minimal satisfactory service requirement rather than micromanaging diversity directly.