Team Production and the Homophily Trap: Evidence from Open Source Software

Abstract:

We investigate diversity and productivity in team production, in the setting of open source software. We find that team diversity is low and has a double-peaked distribution, with the most mass at the lowest level of diversity i.e. monoculture. This pattern is not explained by the standard benefits and costs of team diversity. It is explained by homophily, the preference to associate with similar people, which leads to teams becoming trapped in low-diversity equilibria. Teams that escape the “homophily trap” add more diversity and increase productivity relative to teams that do not.