Abstract
Most studies that compare individual and group behavior neglect the in-group decision making process. This paper explores the decision making process within groups in a strategic setting: a two player power-to-take experiment. Discussions preceding group decisions are video taped and analyzed. We find the following: (1) no impact of the group setting as such on individual behavior; (2) heterogeneity of individual types; (3) perceptions of fairness are hardly discussed and are prone to the self-serving bias; (4) groups ignore the decision rule of other groups and typically view them as if they were single agents. (5) We also show that to explain group outcomes two factors have to be taken into account that are often neglected: the distribution of individual types over groups and the decision rules that groups use to arrive at their decision.
Article PDF
Similar content being viewed by others
Avoid common mistakes on your manuscript.
References
Andreoni, J., Castillo, M., & Petrie, R. (2003). What do bargainers’ preferences look like? Experiments with a convex ultimatum game. American Economic Review, 93, 672–685
Babcock, L., & Loewenstein, G. (1997). Explaining bargaining impasse. The role of self-serving bias. Journal of Economic Perspectives, 11, 109–126
Bakeman, R. (2000). Behavioral observation and coding. In H.T. Reis and Ch. M. Judd (eds.), Handbook of research methods in social and personality psychology, 138–159. Cambridge: Cambridge University Press. UK.
Bolton, G. E., & Zwick, R. (1995). Anonymity versus punishment in ultimatum bargaining. Games and Economic Behavior, 10, 95–121
Bone, J., Hey, J., & Suckling, J. (1999). Are groups more (or Less) consistent than individuals?. Journal of Risk and Uncertainty, 8, 63–81
Bornstein, G. (2003). Intergroup Conflict. Individual, Group, and Collective Interests. Personality and Social Psychology Review, 7, 129–145
Bornstein, G., & Yaniv, I. (1998). Individual and group behavior in the ultimatum game. Are groups more rational players? Experimental Economics, 1, 101–108
Bornstein, G., Kugler, T., & Ziegelmeyer, A. (2004). Individual and group decisions in the centipede game: Are groups more rational players? Journal of Experimental Social Psychology, 40, 599–605
Bornstein, G., Budescu, D. V., Kugler, T., & Selten, R. (2005). Repeated price competition between individuals and between teams. Working paper. The Hebrew University. Jerusalem.
Bosman, R., & van Winden, F. (2002). Emotional Hazard in a Power-to-Take Experiment. The Economic Journal, 112, 146–69
Bottom, W. P., Krishna, L., & Miller, G. J. (2002). Propagation of individual bias through group judgment. Error in the treatment of asymmetrically informative signals. Journal of Risk and Uncertainty, 25, 147–163
Brosig, J., Ockenfels, A., & Weimann, J. (2003). The effect of communication media on cooperation. German Economic Review 4, 217–241
Camerer, C.F. (2003). Behavioral game theory. Princeton: Princeton University Press
Cason, T. N., & Mui, V. -L. (1997). A laboratory study of group polarization in the team dictator game. Economic Journal, 107, 1465–83
Cooper, D. J., & Kagel, J. H. (2005). Are two heads better than one? Team versus Individual Play in Signaling Games. The American Economic Review, 95, 477–509
Corden, R. (2001). Group discussion and the importance of a shared perspective. Learning from collaborative research. Qualitative-Research, 1, 347–367
Cox, J. C., & Hayne, S. C. (2002). Barking up the wrong tree. Are small groups rational agents? Working Paper. University of Arizona
Dahl, G. B., & Ransom, M. R. (1999). Does where you stand depend on where you sit? Tithing donations and self-serving bias. American Economic Review, 89, 703–727
Davis, J.H. (1973). Group decision and social interaction. Theory of social decision schemes. Psychological Review, 80, 97–125
van Dijk, F., Sonnemans, J., & van Winden, F. (2001). Incentive systems in a real effort experiment. European Economic Review, 45, 187–214
Endres, J., Poggenpohl, C., & Erben, C. (1999). Repetitions, warnings and video. Cognitive and motivational components in preschool children’s suggestibility. Legal and Criminological Psychology, 4, 129–146
Fehr, E., & Schmidt, K. M. (1999). A theory of fairness, competition, and cooperation. Quarterly Journal of Economics, 114, 817–68
Fischbacher, U., Gächter, S., & Fehr, E. (2001). Are people conditionally cooperative? Evidence from a Public Goods Experiment. Economics Letters, 71, 397–404
Frijda, N. H. (1986). The emotions. Cambridge: Cambridge University Press
Goren, H., & Bornstein, G. (2000). The effects of intragroup communication on intergroup cooperation in the repeated intergroup prisoner’s dilemma (IPD) game. Journal of Conflict Resolution, 44(5), 700–719
Guarnaschelli, S., McKelvey, R. D., & Palfrey, Th. R. (2000). An experimental study of jury decision rules. American Political Science Review, 94, 407–423
Hennig-Schmidt, H. (1999). Bargaining in a video experiment. Determinants of boundedly rational behavior New York: Springer 1999
Hennig-Schmidt, H. (2002). The impact of fairness on decision making–An analysis of different video experiments. In F. Andersson, and H. Holm (eds.), Experimental Economics. Financial Markets. Auctions. and Decision Making. Dordrecht: Kluwer Academic Publishers, 185–210
Hoffman, E., McCabe, K., & Smith, V. (1996). Social distance and other-regarding behavior. American Economic Review, 86, L653–60
Kerr, N. L., Kramer, G. P., & MacCoun, R. J. (1996). Bias in Judgment. Comparing Individuals and Groups, Psychological Review, 103, 687–719
Kerr, N. L., Niedermeier, K. E., & Kaplan, M. F. (1999). Bias in Jurors vs. Bias in Juries. New Evidence from the SDS Perspective. Organizational Behavior and Human Decision Processes, 80, 70–86
Kocher, M. G., & Sutter, M. (2002). Individual versus group behavior and the role of the decision making process in gift-exchange experiments. Papers on Strategic Interaction. 27/2002. Max-Planck-Institute for Research into Economic Systems
Kocher, M. G., & Sutter, M. (2005). The ‘Decision Maker’ matters. Individual versus team behavior in experimental ‘Beauty-Contest’ games. Economic Journal, 115, 200–223
Laughlin, P. R. (1999). Collective induction. Twelve postulates. Organizational behavior and human decision processes, 80, 50–69
Levine, J. M. (1999). Transforming individuals into groups. Some hallmarks of the SDS approach to small group research. Organizational Behavior and Human Decision Processes, 80, 21–27
Loomes, G. (1999). Some lessons from past experiments and some challenges for the future. The Economic Journal, 109, F35–F45
Messick, D. M., Moore, D. A., & Bazerman, M.H. (1997). Ultimatum bargaining with a group. Underestimating the importance of the decision rule. Organizational Behavior and Human Decision Processes, 69, 87–101
Orbell, J. M., Dawes, R. M., & van der Kragt, A. J. C. (1988). Explaining discussion-induced cooperation. Journal of personality and social psychology 5, 811–819
Potter, J. (1996). Discourse analysis. Theoretical background. In J.T.E. Richardson (Ed.), Handbook of Qualitative Research Methods for Psychology and the Social Sciences. Leicester: The British Psychological Society, 125–140
Raab, Ph., B. C. Schipper (2004). Cournot Competition between Teams. An experimental study. Bonn graduate school of economics. University of Bonn. Discussion Paper No. 13/2004.
Ratcliff, D. (2003). Video methods in qualitative research. In P. M. Camic J.E. Rhodes, and L. Yardley (eds.), Qualitative research in psychology. expanding perspectives in methodology and design. Washington. DC: American Psychological Association 113–129
Robert, C., & Carnevale, P. J. (1997). Group choice in ultimatum bargaining. Organizational Behavior and Human Decision Processes, 72, 256–279
Rockenbach, B., Sadrieh, A., & Mathauschek B. (2005). Teams take the better risk. Journal of Economic Behavior and Organization (forthcoming)
Rutström E. E. L., & Williams, M. B. (2000). Entitlements and fairness. An experimental study of distributive preferences. Journal of Economic Behavior and Organization, 43, 75–89
Stasser, G. (1999). A primer of social decision scheme theory. Models of group influence, Competitive model testing, and prospective modeling. Organizational Behavior and Human Decision Processes, 80, 3–20
Wildshut, T., Pinter, B., Vevea, J. L., Insko, Ch. A., & Schopler, J. (2003). Beyond the group mind. A quantitative review of the interindividual–Intergroup discontinuity effect. Psychological Bulletin. 129. 5, 698–722
Author information
Authors and Affiliations
Corresponding author
Additional information
JEL Classification A12 · C72 · C91 · C92
Rights and permissions
About this article
Cite this article
Bosman, R., Hennig-Schmidt, H. & van Winden, F. Exploring group decision making in a power-to-take experiment. Exp Econ 9, 35–51 (2006). https://doi.org/10.1007/s10683-006-4310-9
Received:
Revised:
Accepted:
Issue Date:
DOI: https://doi.org/10.1007/s10683-006-4310-9