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Same process, different outcomes: group performance in an acquiring a company experiment

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Listed:
  • Marco Casari

    (University of Bologna)

  • Jingjing Zhang

    (University of Technology Sydney)

  • Christine Jackson

    (Purdue University)

Abstract

It is still an open question when groups perform better than individuals in intellective tasks. We report that in an Acquiring a Company game, what prevailed when there was disagreement among group members was the median proposal and not the best proposal. This aggregation rule explains why groups underperformed with respect to a “truth wins” benchmark and why they performed better than individuals deciding in isolation in a simple version of the task but worse in the more difficult version. Implications are drawn on when to employ groups rather than individuals in decision making.

Suggested Citation

  • Marco Casari & Jingjing Zhang & Christine Jackson, 2016. "Same process, different outcomes: group performance in an acquiring a company experiment," Experimental Economics, Springer;Economic Science Association, vol. 19(4), pages 764-791, December.
    • Handle: RePEc:kap:expeco:v:19:y:2016:i:4:d:10.1007_s10683-015-9467-7
    DOI: 10.1007/s10683-015-9467-7
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    3. Penczynski, Stefan P., 2016. "Persuasion: An experimental study of team decision making," Journal of Economic Psychology, Elsevier, vol. 56(C), pages 244-261.
    4. Maria Karmeliuk & Martin G. Kocher & Georg Schmidt, 2022. "Teams and individuals in standard auction formats: decisions and emotions," Experimental Economics, Springer;Economic Science Association, vol. 25(5), pages 1327-1348, November.
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    6. Ayala Arad & Kevin P. Grubiak & Stefan P. Penczynski, 2024. "Does communicating within a team influence individuals’ reasoning and decisions?," Experimental Economics, Springer;Economic Science Association, vol. 27(1), pages 109-129, March.
    7. Brocas, Isabelle & Carrillo, Juan D., 2022. "Adverse selection and contingent reasoning in preadolescents and teenagers," Games and Economic Behavior, Elsevier, vol. 133(C), pages 331-351.

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    More about this item

    Keywords

    Winner’s curse; Group decision making; Communication; Risky shift; Herd behavior;
    All these keywords.

    JEL classification:

    • 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 Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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