Maintaining E ¢ ciency While Integrating Entrants From Lower-Performing Environments: An Experimental Study

E ¢ cient growth often requires the integration of individuals from lower-performing groups, \u85 rms, or societies into higher-performing ones. Such integration may be di ¢-cult without facilitating interventions or restrictions. We explore, using a laboratory experiment, the e¤ectiveness of two regularly-employed entry restrictions: entry quotas and entry exams. We use a coordination game with Pareto-ranked equilibria, in which we allow an e ¢ ciently-coordinated group and an ine ¢ ciently-coordinated one to arise endogenously. We then allow individuals to move from the low-performing group to the high-performing one. We vary whether such movement is unrestricted, is limited to one entrant per period, or is subject to passing an entry exam. We \u85nd both kinds of restric-tions improve the e ¢ cient integration of entrants, but that there is no additional bene\u85t obtained by their combination. The restrictions lead to improved behavior among en-trants, but they have a stronger inuence on the maintenance of good behavior among incumbents in the high-performing group