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Promises in group decision making

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  • Faralla, Valeria
  • Borà, Guido
  • Innocenti, Alessandro
  • Novarese, Marco

Abstract

We assess in the laboratory the effect of promises on group decision-making. The gift-exchange game provides the testing ground for our experiment. When the game is played between groups, inter-group cooperation and reciprocity represent a condition for increasing total earnings as a measure of social efficiency. Our findings show that promises have positive effect on aggregate payoffs and that effect is reinforced when a group member is randomly selected as proposer to set forth an effort/transfer level that other group members can approve or reject. Promises and proposers elicit social conformity leading groups to exhibit more desirable social behavior.

Suggested Citation

  • Faralla, Valeria & Borà, Guido & Innocenti, Alessandro & Novarese, Marco, 2020. "Promises in group decision making," Research in Economics, Elsevier, vol. 74(1), pages 1-11.
    • Handle: RePEc:eee:reecon:v:74:y:2020:i:1:p:1-11
    DOI: 10.1016/j.rie.2019.11.001
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    Keywords

    Group decision; Promise; Gift-exchange game; Social efficiency;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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