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The Decision Maker Matters: Individual versus Group Behaviour in Experimental Beauty-Contest Games

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Author Info
Martin G. Kocher
Matthias Sutter ()

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Abstract

Economics has devoted little attention so far as to whether the type of decision maker matters for economic decisions. However, many important decisions like those on monetary policy or a company's business strategy are made by (small) groups rather than an individual. We compare behaviour of individuals and small groups in an experimental beauty-contest game. Our findings suggest that groups are not smarter decision makers per se, but that they learn faster than individuals. When individuals compete against groups, the latter significantly outperform the former in terms of payoff.

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Paper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Discussion Papers on Strategic Interaction with number 2004-09.

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Length: 35 pages
Date of creation: Feb 2004
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Handle: RePEc:esi:discus:2004-09

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Related research
Keywords: beauty-contest experiments group behavior individual behavior learning

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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References listed on IDEAS
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.:
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  12. Rosemarie Nagel & Antoni Bosch-Domènech & Albert Satorra & José García Montalvo, 1999. "One, Two, (Three), Infinity: Newspaper and Lab Beauty-Contest Experiments," Economics Working Papers 438, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
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    Other versions:
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Full references

Cited by:
(explanations, 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.)

  1. Matthias Sutter & Martin Kocher & Sabine Strauß, . "Individuals and teams in UMTS-license auctions," Working Papers 2007-23, Faculty of Economics and Statistics, University of Innsbruck. [Downloadable!]
  2. David Masclet & Youenn Loheac & Laurent Denant-Boemont & Nathalie Colombier, 2004. "Group and individual risk preferences : a lottery-choice experiment," Cahiers de la Maison des Sciences Economiques bla06063, Université Panthéon-Sorbonne (Paris 1), revised Sep 2006. [Downloadable!]
  3. Charness, Gary & Jackson, Matthew O., 2004. "Group Play in Games and the Role of Consent in Network Formation," Working Papers 1193, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
    Other versions:
  4. Antoni Bosch-Domenech et al., 2002. "One, Two, (Three), Infinity, . . . : Newspaper and Lab Beauty-Contest Experiments," American Economic Review, American Economic Association, vol. 92(5), pages 1687-1701, December. [Downloadable!] (restricted)
  5. Martin G. Kocher & Matthias Sutter, 2004. "Time is money - Time pressure, incentives, and the quality of decision-making," Discussion Papers on Strategic Interaction 2004-05, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
    Other versions:
  6. Virtudes Alba-Fernández & Pablo Brañas-Garza & Francisca Jiménez-Jiménez & Javier Rodero-Cosano, 2004. "Teaching Nash Equilibrium and Dominance: A Classroom Experiment on the Beauty Contest," IESA Working Papers Series 0413, Institute for Social Syudies of Andalusia - Higher Council for Scientific Research. [Downloadable!]
  7. Manfred Königstein & Gabriele K. Ruchala, 2007. "Performance Pay, Group Selection and Group Performance," IZA Discussion Papers 2697, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Napel, Stefan & Widgrén, Mika, 2003. "EU Conciliation Committee: Council 56 versus Parliament 6," CEPR Discussion Papers 4071, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  9. Matthias Sutter, 2004. "Are four heads better than two? An experimental beauty-contest game with teams of different size," Discussion Papers on Strategic Interaction 2004-15, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
    Other versions:
  10. Ronald Bosman & Heike Hennig-Schmidt & Frans vanWinden, 2002. "Exploring Group Behavior in a Power-to-Take Video Experiment," Bonn Econ Discussion Papers bgse7_2002, University of Bonn, Germany, revised May 2002. [Downloadable!]
  11. Virtudes Alba-Fernández & Pablo Brañas-Garza & Francisca Jiménez-Jiménez & Javier Rodero-Cosano, 2004. "Communication, coordination and competition in the beauty contest game: Eleven classroom experiments," IESA Working Papers Series 0416, Institute for Social Syudies of Andalusia - Higher Council for Scientific Research. [Downloadable!]
    Other versions:
  12. W. Güth & M. Kocher & M. Sutter, . "Experimental Beauty Contests with Homogeneous and Heterogeneous Players and with Interior and Boundary Equilibria," Sonderforschungsbereich 373 2001-45, Humboldt Universitaet Berlin.
    Other versions:
  13. Wolfgang J. Luhan & Martin G. Kocher & Matthias Sutter, 2006. "Group Polarization in the Team Dictator Game reconsidered," Tinbergen Institute Discussion Papers 06-099/1, Tinbergen Institute. [Downloadable!]
    Other versions:
  14. David J. Cooper & John H. Kagel, 2005. "Are Two Heads Better than One? Team versus Individual Play in Signaling Games," American Economic Review, American Economic Association, vol. 95(3), pages 477-509, June. [Downloadable!] (restricted)
  15. Napel, Stefan & Widgren, Mika, 2003. "Bargaining and Distribution of Power in the EU's Conciliation Committee," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  16. Ronald Bosman & Frans van Winden, 2002. "Emotional Hazard in a Power-to-take Experiment," Economic Journal, Royal Economic Society, vol. 112(476), pages 147-169, January. [Downloadable!] (restricted)
  17. Martin Kocher & Sabine Strauß & Matthias Sutter, 2004. "Individual or team decision-making - Causes and consequences of self-selection," Discussion Papers on Strategic Interaction 2004-31, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
    Other versions:
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