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

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  • Martin G. Kocher
  • Matthias Sutter

Abstract

Economics has devoted little attention 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. Copyright 2005 Royal Economic Society.

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  • Martin G. Kocher & Matthias Sutter, 2005. "The Decision Maker Matters: Individual Versus Group Behaviour in Experimental Beauty-Contest Games," Economic Journal, Royal Economic Society, vol. 115(500), pages 200-223, January.
    • Handle: RePEc:ecj:econjl:v:115:y:2005:i:500:p:200-223
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    More about this item

    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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