Title: First in Village or Second in Rome?
Reference Number: 1078
Publication Date: November 2003

Ettore Damiano
University of Toronto

Li Hao
University of Toronto

Wing Suen
The University of Hong Kong

Through individuals prefer to join groups with high quality peers, there are also advantages from being high up in the pecking order within the group. We show that sorting of agents in this environment results in an overlapping interval structure in the type space. Segregation and mixing coexist in a stable equilibrium. A greater degree of egalitarianism within organizations leads to greater segregation across organizations. Policies that are effective for lower-quality organizations to attract talent may be counterproductive for higher-quality organizations to retain talent.

Published in International Economic Review 51:1 (February 2010), pp. 263-288.

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Last modified: 09/15/2010