Teams Punish Less
20 Pages Posted: 2 Oct 2013
Date Written: September 30, 2013
Many decisions in politics and business are made by teams rather than by single individuals. In contrast, economic models typically assume an individual rational decision maker. A rapidly growing body of (experimental) literature investigates team decisions in different settings. We study team decisions in a public goods contribution game with a costly punishment option and compare it to the behavior of individuals in a laboratory experiment. We also consider different team decision-making rules (unanimity, majority). We find that teams contribute significantly more and punish less than individuals, regardless of the team decision rule. Overall, teams yield higher payoffs than individuals.
Keywords: group decision making, public good, experiment, punishment
JEL Classification: H540, Q540, Q580
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