  Prior work has provided strong evidence that, within organizational settings,
teams that bring a diversity of information and perspectives to a task are more
effective than teams that do not. If this form of informational diversity
confers performance advantages, why do we often see largely homogeneous teams
in practice? One canonical argument is that the benefits of informational
diversity are in tension with affinity bias. To better understand the impact of
this tension on the makeup of teams, we analyze a sequential model of team
formation in which individuals care about their team's performance (captured in
terms of accurately predicting some future outcome based on a set of features)
but experience a cost as a result of interacting with teammates who use
different approaches to the prediction task. Our analysis of this simple model
reveals a set of subtle behaviors that team-growth dynamics can exhibit: (i)
from certain initial team compositions, they can make progress toward better
performance but then get stuck partway to optimally diverse teams; while (ii)
from other initial compositions, they can also move away from this optimal
balance as the majority group tries to crowd out the opinions of the minority.
The initial composition of the team can determine whether the dynamics will
move toward or away from performance optimality, painting a path-dependent
picture of inefficiencies in team compositions. Our results formalize a
fundamental limitation of utility-based motivations to drive informational
diversity in organizations and hint at interventions that may improve
informational diversity and performance simultaneously.
