Book Reviews

Scott E. Page: The Diversity Bonus [Book Review]

Scott E. Page is one of my favorite writers. A professor of complex systems, political science, and economics at the University of Michigan, he is the author of The Difference, Complex Adaptive Systems, and Diversity and Complexity. He also gave a wonderful on-line course on model thinking, still available on Coursera.

Scott E. Page The Diversity Bonus

The Diversity Bonus: How Great Teams Pay Off in the Knowledge Economy by Scott E. Page

The Diversity Bonus: How Great Teams Pay Off in the Knowledge Economy (Princeton University Press, 2017) continues his thinking on the complicated, often contentious subject of diversity. The core logic for how diversity produces bonuses relies on linking cognitive diversity (differences in information, knowledge, representations, mental models, and heuristics) to better outcomes on tasks such as problem solving, predicting, and designing. Cognitive diversity is to be distinguished from identity diversity (differences in race, gender, age, physical capabilities, and sexual orientation), although identity diversity can often contribute significantly to cognitive diversity.

Some people try to view diversity as analogous to a diversified investment portfolio, but they miss the point. “The portfolio performs like the average. The problem-solving team performs like the best. Actually, the team does even better if team members can share ideas.”

Page is careful not to overpromise on the benefits of diversity. Although in some cases cognitive and identity diversity produce bonuses, “in others (see the US Congress) they contribute to conflict.” Wall Street, however, is a place where both cognitive and identity diversity pay off. “Team-run funds outperform individuals and gender-mixed teams outperform all-male teams.”

Page’s book offers a compellingly pragmatic justification for both cognitive and identity diversity. Unlike normative arguments for identity diversity and inclusion, which “seek to redress past wrongs or create a more equitable future,” the diversity-bonus logic “shows that cognitively diverse teams perform better on complex tasks.” The widespread view that diversity harms performance (exemplified by Antonin Scalia’s opinion that schools and employers face a choice: they can choose diversity, or they can choose to be “super duper”) overstates the case. True, “replacing a member of a relay team with a slower runner or hiring a data analyst who makes errors at a higher rate based on identity considerations sacrifices quality on the altar of social justice.” But when it comes to complex tasks, having a diverse team is not a sacrifice but is often instead a benefit.

Article by Brenda Jubin, Reading The Markets