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The impact of communication regimes on group rationality: Experimental evidence

  • Meub, Lukas
  • Proeger, Till
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    The performance of groups has been thoroughly investigated in experimental economics, showing that groups are overall more rational deciders than individuals. However, superior group performance in economic experiments has primarily been shown for face-toface decision making, which has ceased to be the prevalent form of communication in many IT-based organizations. To test the robustness of higher group rationality under conditions of virtual communication, we conduct a social learning experiment. We find that virtual communication leads to a substantial deterioration of group rationality for a judgmental task, while there is no effect for a purely intellective task. Further, we show that higher cognitive abilities of group members have no impact for the judgmental task, yet increase rationality for the intellective task. Our results have potential implications for the design of communication structures within decentralized organizations relying on virtual communication.

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    File URL: http://econstor.eu/bitstream/10419/90872/1/777082586.pdf
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    Paper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 185.

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    Date of creation: 2014
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    Handle: RePEc:zbw:cegedp:185
    Contact details of provider: Postal: Platz der Göttinger Sieben 3, 37073 Göttingen
    Web page: http://www.cege.wiso.uni-goettingen.de/

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    9. Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 2010. "A theory of Fads, Fashion, Custom and cultural change as informational Cascades," Levine's Working Paper Archive 1193, David K. Levine.
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    12. Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
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