When Do Groups Perform Better than Individuals? A Company Takeover Experiment
AbstractIt is still an open question when groups will perform better than individuals in intellectual tasks. We report that in a company takeover experiment, groups placed better bids than individuals and substantially reduced the winner’s curse. This improvement was mostly due to peer pressure over the minority opinion and to group learning. Learning took place from interacting and negotiating consensus with others, not simply from observing their bids. When there was disagreement within a group, what prevailed was not the best proposal but the one of the majority. Groups underperformed with respect to a “truth wins” benchmark although they outperformed individuals deciding in isolation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number wp763.
Date of creation: Jun 2011
Date of revision:
Contact details of provider:
Postal: Piazza Scaravilli, 2, and Strada Maggiore, 45, 40125 Bologna
Phone: +39 051 209 8019 and 2600
Fax: +39 051 209 8040 and 2664
Web page: http://www.dse.unibo.it
More information through EDIRC
Other versions of this item:
- Marco Casari & Jingjing Zhang & Christine Jackson, 2010. "When do groups perform better than individuals? A company takeover experiment," IEW - Working Papers 504, Institute for Empirical Research in Economics - University of Zurich, revised Apr 2012.
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-13 (All new papers)
- NEP-CBE-2011-07-13 (Cognitive & Behavioural Economics)
- NEP-CDM-2011-07-13 (Collective Decision-Making)
- NEP-EXP-2011-07-13 (Experimental Economics)
- NEP-MIC-2011-07-13 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Brit Grosskopf & Yoella Bereby-Meyer & Max Bazerman, 2007. "On the Robustness of the Winnerâ€™s Curse Phenomenon," Theory and Decision, Springer, vol. 63(4), pages 389-418, December.
- Reinhard Selten & Klaus Abbink & Ricarda Cox, 2005.
"Learning Direction Theory and the Winnerâ€™s Curse,"
Springer, vol. 8(1), pages 5-20, April.
- Ball, Sheryl B. & Bazerman, Max H. & Carroll, John S., 1991. "An evaluation of learning in the bilateral winner's curse," Organizational Behavior and Human Decision Processes, Elsevier, vol. 48(1), pages 1-22, February.
- Holt, Charles A & Sherman, Roger, 1994. "The Loser's Curse," American Economic Review, American Economic Association, vol. 84(3), pages 642-52, June.
- Thomas Stöckl & Jürgen Huber & Michael Kirchler & Florian Lindner, 2013. "Hot Hand Belief and Gambler's Fallacy in Teams: Evidence from Investment Experiments," Working Papers 2013-04, Faculty of Economics and Statistics, University of Innsbruck.
- David J. Cooper & Matthias Sutter, 2011.
"Role selection and team performance,"
2011-14, Faculty of Economics and Statistics, University of Innsbruck.
- Jeanette Brosid-Koch & Timo Heinrich & Christoph Helbach, 2013. "Does Truth Win When Teams Reason Strategically?," Ruhr Economic Papers 0396, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Frans van Dijk & Joep H. Sonnemans & Ed Bauw, 2012. "Judicial Error by Groups and Individuals," Tinbergen Institute Discussion Papers 12-029/3, Tinbergen Institute.
- Tamar Kugler & Edgar E. Kausel & Martin G. Kocher, 2012. "Are Groups more Rational than Individuals? A Review of Interactive Decision Making in Groups," CESifo Working Paper Series 3701, CESifo Group Munich.
- Jingjing Zhang, 2012. "Communication in asymmetric group competition over public goods," ECON - Working Papers 069, Department of Economics - University of Zurich.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Luca Miselli).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.