Title: Group formation and diversity Speaker: Ming Li, Concordia University Host: Hua Shang, Associate professor, RIEM Time: 14:30-16:00, March 25, Friday Venue: Yide building H511, Liulin Campus Abstract: The formation of groups involves two considerations: larger and more diverse groups bring in more resources and knowledge, but in the mean- time may make common decisions that are far away from individuals’ ideal actions. We demonstrate in this paper that the tradeoff between these two effects determines the composition of groups. We show that in equilibrium, individuals will form groups with others whose preferences are similar to their own. The decentralized equilibrium results in maximin groups, where the worst-off individuals’ payoffs are maximized. Such groups tend to be too small/homogenous by the utilitarian standard. Finally, we demonstrate our findings with an example of information sharing and group formation.
