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Diversity and Performance: Networks of Cognition in Markets and Teams

Periodic Reporting for period 2 - BLINDSPOT (Diversity and Performance: Networks of Cognition in Markets and Teams)

Reporting period: 2018-03-01 to 2019-08-31

Project Summary:

Contemporary organizations face three interrelated, but analytically distinguishable, challenges. First, they should be alert to mistakes that could be catastrophic. Second, they need to allocate attention, especially to correct past mistakes and to make accurate predictions about future developments. Third, they should be innovative, able to stand out from existing categories while being recognized as outstanding. This project investigates these cognitive challenges with the aim of developing a comprehensive sociological approach to study the social properties of cognition. Research on error detection, attention allocation, and recognizant innovation will be conducted in three distinct settings strategically chosen so that the scale and complexity of the performance challenges increases across each case.

Project Goals:

The research question that cuts across the aforementioned socio-cognitive challenges asks whether and, if so, how diversity contributes to performance. The nature of the research question requires an interdisciplinary approach. The project has three-sub goals, each addressed using different research designs:

1) We first test how social context, understood at the most basic level as the composition of a small collectivity, affects behaviour. To do so, we use experimental methods to test how ethnic diversity affects decision-making.

2) The second study tests how the social structure of attention affects valuation. The activities studied involve error correction and accuracy of prediction in estimates by securities analysts; the method is two-mode network analysis; and the timing, intensity, and diversity of attention networks are the effects to be tested.

3) The third study examines relations within and across collaborative teams. In studying the network properties of creativity, the challenge is recognizant innovation, the activity involves releases in the field of music, the method is cultural network analysis, and the effects to be tested are the combined effects of stylistic diversity and social structure.

Project Importance:

The organisational challenges we have chosen to study are particularly relevant for contemporary societies because the consequences that can arise from their mishandling can be devastating. For example, we have chosen to focus on market price bubbles as a compelling instance where a lack of collective error detection can be costly or even catastrophic for individuals, nations, and the global economy. Similarly, salient attention allocation regarding prior events and errors can be crucial for organisations, as these prior occurrences inevitably factor into the making of accurate predictions about future developments and in acting accordingly. Finally, the third subject matter to which we turn our focus, that of not only producing novelty, but of recognising novelty when it occurs, presents an important socio-cognitive challenge for organisations in their competitive imperative to break with existing categories.
As of yet our team has had 15 articles accepted for publication in leading scholarly journals and 1 chapter in an edited volume. In addition, to papers published or in press, 5 major papers are currently under review, 17 Working Papers have been written, and we have presented our findings in more than 30 different academic conference venues. Members of our team have also accepted invitations to present their research at over 20 faculty and research society events since the project began.

Stark supervised all aspects of the project, hired postdoctoral fellows and other staff, worked with other senior staff and postdoctoral fellows to design research and analyze data, drafted and published scholarly articles, presented findings at various academic conferences. This included organising two workshops that were held 2018. Materials from the second workshop, 'Put to the Test', are currently under review for a special issue of the British Journal of Sociology, which is to be edited by Stark and project advisor Noortje Marres. A third workshop took place in July 2019.

Stark was involved directly in data analysis with Professor Prato in Lugano on attention networks. With Professor Levine and Postdoctoral Fellow Charlotte Reypens in the Warwick unit, he worked on experimental research design and conducted experiments on gender and racial diversity and decision-making, the results of which have been developed into two papers. Research and results from these experiments have been disseminated widely at academic and industry speaking events and conferences. With Professor Ferriani at the University of Bologna and Professor Santoni at the Cass Business School, Stark has developed a theoretical model of online cultural markets which they are testing with a database from the SoundCloud music-sharing platform. With Giovanni Formilan he is conducting research on the performance of artistic identities among musicians. Stark is currently under contract with the Oxford University Press to edit a volume on performance.
For the laboratory experimental part of this project we hired an excellent postdoctoral fellow to probe the mechanisms that stood behind our initial findings on the impact of diversity. We designed several experimental tasks to isolate factors that might explain herding (in ethnic/gender diverse/homogenous settings) such as trust, overconfidence, animosity, familiarity and so on. Our findings, however, are still preliminary, mostly due to sample size because of the difficulties of recruiting people of specific ethnicities. Unfortunately, interactions between black and white participants could not be tested in the lab at the University of Warwick where the population of students is predominantly white and Asian. At Columbia University we confronted the same difficulties but were able to collect data on gender, leading to new hypotheses that we are currently testing on an online platform.

Senior researcher Simone Santoni in London has secured an official research affiliation status for the project at SoundCloud, the leading online music-sharing platform. Through this arrangement we have created an extraordinary database encompassing a 10% sample of an entire month of SoundCloud data. Analysis of that data is now underway and we anticipate some high visibility publications.

Thus far our project has developed, and continues to develop, an intentionally mixed-methods approach to the relation of sociological and organisational factors on cognitive activity, which we believe are too often overlooked in analyses of decision-making and performance. Our experimental research supports this belief, from which we have developed papers demonstrating the effects of gender, racial, and skills diversity upon activities which are otherwise considered bracketed within the domain of individual cognition and to the disciplines for which it is traditionally an object. In these papers we have also developed and tested empirically-supported strategies for maximising performance and mitigating biases in diverse institutional contexts, for example in our data-driven arguments for more inclusive forms of racial diversity. Methodologically, we have also developed from this research a novel approach to the analysis of networks and their role in competition. We have prepared our experimental research in the form of papers which are to be submitted to leading journals.