Groups Make Better Self-Interested Decisions

In this paper, we describe what economists have learned about differences between group and individual decision-making. This literature is still young, and in this paper, we will mostly draw on experimental work (mainly in the laboratory) that has compared individual decision-making to group decisio...

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Veröffentlicht in:The Journal of economic perspectives Jg. 26; H. 3; S. 157 - 176
Hauptverfasser: Charness, Gary, Sutter, Matthias
Format: Journal Article
Sprache:Englisch
Veröffentlicht: Nashville American Economic Association 01.07.2012
Schlagworte:
Behavior
Cognitive bias
College students
Decision making
Economic behavior
Economic models
Economic policy
Economic research
Economic theory
Economics
Economics education
Economists
Eigeninteresse
Error rates
Experimental methods
Field experiments
Game theory
Games
Group decision making
Groups
Gruppenentscheidung
Kognition
Laboratories
Membership
Nationalekonomi
Productivity
Public finance
Rationality
Retirement
Social interaction
Social welfare
Studies
Test
Undergraduate students
ISSN:0895-3309, 1944-7965
Online-Zugang:Volltext
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Beschreibung
Zusammenfassung:In this paper, we describe what economists have learned about differences between group and individual decision-making. This literature is still young, and in this paper, we will mostly draw on experimental work (mainly in the laboratory) that has compared individual decision-making to group decision-making, and to individual decision-making in situations with salient group membership. The bottom line emerging from economic research on group decision-making is that groups are more likely to make choices that follow standard game-theoretic predictions, while individuals are more likely to be influenced by biases, cognitive limitations, and social considerations. In this sense, groups are generally less “behavioral” than individuals. An immediate implication of this result is that individual decisions in isolation cannot necessarily be assumed to be good predictors of the decisions made by groups. More broadly, the evidence casts doubts on traditional approaches that model economic behavior as if individuals were making decisions in isolation.
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ISSN:0895-3309
1944-7965
DOI:10.1257/jep.26.3.157