The Disagreement Dividend

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.