Committees Versus Individuals: An Experimental Analysis of Monetary Policy Decision Making
AbstractWe report the results of an experimental analysis of monetary policy decision making under uncertainty. A large sample of economics students played a simple monetary policy game, both as individuals and in committees of five players. Our findings - that groups make better decisions than individuals - accord with previous work by Blinder and Morgan. We also attempt to establish why this is so. Some of the improvement is related to the ability of committees to strip out the effect of bad play, but there is a significant additional improvement, which we associate with players learning from each other’s interest rate decisions.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 823.
Date of creation: 08 Feb 2005
Date of revision:
Publication status: Published in International Journal of Central Banking Number 1.Volume(2005): pp. 181-205
Monetary policy; experimental economics; central banking; uncertainty;
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-12-04 (All new papers)
- NEP-CBA-2006-12-04 (Central Banking)
- NEP-CBE-2006-12-04 (Cognitive & Behavioural Economics)
- NEP-CDM-2006-12-04 (Collective Decision-Making)
- NEP-EXP-2006-12-04 (Experimental Economics)
- NEP-MAC-2006-12-04 (Macroeconomics)
- NEP-MON-2006-12-04 (Monetary Economics)
- NEP-POL-2006-12-04 (Positive Political Economics)
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