The Disagreement Dividend

TL;DR

This paper examines how disagreement within teams about technology productivity can enhance overall performance, especially with positive externalities and multiple technologies, by motivating increased effort and diverse strategies.

Contribution

It introduces a dynamic game model showing that disagreement can boost team effort and productivity when externalities are strong or multiple technologies are available.

Findings

Disagreement leads to higher effort among team members.

Teams with disagreement outperform like-minded teams under certain conditions.

Multiple technologies and externalities amplify the benefits of disagreement.

Abstract

We study how disagreement influences team performance in a dynamic game with positive production externalities. Players can hold different views about the productivity of the available production technologies. This disagreement results in different technology and effort choices -- "optimistic" views induce higher effort than "skeptical" views. Views are changed when falsified by evidence. With a single technology available, optimists exert more effort early on if the team also includes skeptics. With sufficiently strong externalities, a disagreeing team produces, on average, more than any like-minded team. With multiple technologies, disagreement over which technology works best motivates everyone to exert more effort.