Are Groups More Rational Than Individuals? A Review of Interactive Decision Making in Groups

Wiley interdisciplinary reviews. Cognitive science (Impact Factor: 0.79). 07/2012; 3(4):471–482. DOI: 10.1002/wcs.1184


Many decisions are interactive; the outcome of one party depends not only on its decisions or on acts of nature but also on the decisions of others. Standard game theory assumes that individuals are rational, self-interested decision makers—that is, decision makers are selfish, perfect calculators, and flawless executors of their strategies. A myriad of studies shows that these assumptions are problematic, at least when examining decisions made by individuals. In this article, we review the literature of the last 25 years on decision making by groups. Researchers have compared the strategic behavior of groups and individuals in many games: prisoner's dilemma, dictator, ultimatum, trust, centipede and principal–agent games, among others. Our review suggests that results are quite consistent in revealing that group decisions are closer to the game-theoretic assumption of rationality than individual decisions. Given that many real-world decisions are made by groups, it is possible to argue that standard game theory is a better descriptive model than previously believed by experimental researchers. We conclude by discussing future research avenues in this area. WIREs Cogn Sci 2012, 3:471–482. doi: 10.1002/wcs.1184
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Available from: Edgar E Kausel, Sep 29, 2015
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    • "Note that this superiority of groups holds in strategic (e.g., Feri et al., 2010; Sheremeta and Zhang, 2010; Cheung and Coleman, 2011; Sutter eta al., 2013) and non-strategic situations (Blinder and Morgan 2005; Charness et al., 2007; Sutter, 2007; Charness and Sutter, 2012). In addition, the second major contribution shows that groups act more according to a risk-neutral benchmark (maximizing expected value) corroborating findings in Kugler et al. (2012). Groups invest in the risky investment more frequently, choose the risk-free alternative less often and rely less on outside advice compared to individuals. "
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    Journal of Economic Behavior & Organization 09/2015; 117:327–339. DOI:10.1016/j.jebo.2015.07.004 · 1.01 Impact Factor
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    • "Members are frequently selected based on their qualifications, experience, or expertise , and often continue to make similar decisions as individuals when their service on the team is concluded . Although there is considerable research comparing the nature and quality of the decisions made by teams and individuals (for recent reviews, see Charness and Sutter 2012, Kugler et al. 2012), relatively little is known about the effects of being on a team on subsequent individual decisions. However, because teamwork is ubiquitous in organizations, it is highly relevant, and potentially very beneficial, for companies to learn whether team decision making has a positive impact on the decision making of individuals. "
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