Extemporaneous Coordination in Specialist Teams: The Familiarity Complementarity

Team production is ubiquitous in the economy, but managing teams effectively remains a challenge for many organizations. This paper studies how familiarity among teammates influences the performance of specialist teams, relative to nonspecialist teams. Applying theories of team production to contexts where team members coordinate interdependent activities extemporaneously, we develop predictions about factors that shift the marginal returns to specialization along two dimensions of familiarity: social familiarity and functional familiarity. We test our hypotheses in the context of Defence of the Ancients 2 (DOTA2), a major e-sports game where, in some formats, players are exogenously assigned to five-person teams. After analyzing nearly 6.5 million matches, we find that specialist teams are relatively more successful when members are more socially and functionally familiar with one another. The results suggest that the plug-and-play perspective on specialist teams is incomplete; rather, specialization and familiarity are complements in dynamic environments where team members coordinate extemporaneously.