Article

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

ABSTRACT 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.

0 Bookmarks
 · 
85 Views
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: We compare experimentally the revealed distributional preferences of individuals and teams in allocation tasks. We find that teams are significantly more benevolent than individuals in the domain of disadvantageous inequality while the benevolence in the domain of advantageous inequality is similar across decision makers. A consequence for the frequency of preference types is that while a substantial fraction of individuals is classified as inequality averse, this type disappears completely in teams. Spiteful types are markedly more frequent among individuals than among teams. On the other hand, by far more teams than individuals are classified as efficiency lovers.
    Journal of Economic Behavior & Organization 01/2014; · 1.01 Impact Factor
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: Many important decisions are routinely made by transient and temporary teams, which perform their duty and disperse. Team members often continue making similar decisions as individuals. We study how the experience of team decision making affects subsequent individual decisions in two seminal probability and reasoning tasks, the Monty Hall problem and the Wason selection task. Both tasks are hard and involve a general rule, thus allowing for knowledge transfers, and can be embedded in the context of markets that offer identical incentives to teams and individuals. Our results show that teams trade closer to the rational level, learn the solution faster, and achieve this with weaker, less specific performance feedback than individuals. Most importantly, we observe significant knowledge transfers from team decision making to subsequent individual performances that take place up to five weeks later, indicating that exposure to team decision making has strong positive spillovers on the quality of individual decisions.
    Management Science 06/2013; 59(6):1255-1270. · 1.86 Impact Factor
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: The present study examined people’s expectations of how incidental emotions could shape others’ reciprocity in trusting situations, whether these expectations affect people’s own behavior, and how accurate these expectations are. Study 1 explored people’s beliefs about the effects of different incidental emotions on another person’s trustworthiness in general. In Studies 2 and 3, senders in trust games faced angry, guilty, grateful, or emotionally neutral responders. Participants who were told about their counterpart’s emotional state acted consistently with their beliefs about how these emotions would affect the other’s trustworthiness. These beliefs were not always correct, however. There were significant deviations between the expected behavior of angry responders and such responders’ actual behavior. These findings raise the possibility that one player’s knowledge of the other’s emotional state may lead to action choices that yield poor outcomes for both players.
    Journal of Economic Psychology 06/2014; · 1.07 Impact Factor

Full-text (2 Sources)

Download
63 Downloads
Available from
Jun 5, 2014