Moderation in Groups: Evidence from Betting on Ice Break-Ups in Alaska

56 Pages Posted: 23 Sep 2004 Last revised: 23 Jul 2012

See all articles by Renee B. Adams

Renee B. Adams

University of Oxford; ABFER

Daniel Ferreira

London School of Economics - Department of Finance; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Date Written: June 10, 2009

Abstract

We use a large sample of guessed ice break-up dates for the Tanana River in Alaska to study differences between outcomes of decisions made by individuals versus groups. We estimate the distribution of guesses conditional on whether they were made by individual bettors or betting pools. We document two major distinctions between the two sets of guesses: (1) the distribution of guesses made by groups of bettors appears to conform more to the distribution of historical break-up dates than the distribution of guesses made by individual bettors, and (2) the distribution for groups has less mass in its tails and displays lower variability than the distribution for individuals. We argue that these two pieces of evidence are consistent with the hypothesis that group decisions are more moderate, either because groups have to reach a compromise when their members disagree or because individuals with extreme opinions are less likely to be part of a group.

Keywords: Bets, Betting Pools, Decision Making, Variability

JEL Classification: D7, G3

Suggested Citation

Adams, Renée B. and Ferreira, Daniel, Moderation in Groups: Evidence from Betting on Ice Break-Ups in Alaska (June 10, 2009). Available at SSRN: https://ssrn.com/abstract=594501 or http://dx.doi.org/10.2139/ssrn.594501

Renée B. Adams (Contact Author)

University of Oxford ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

ABFER

BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore

Daniel Ferreira

London School of Economics - Department of Finance ( email )

Houghton Street
London, WC2A 2AE
United Kingdom
(+44) 20 7955 7544 (Phone)

HOME PAGE: http://personal.lse.ac.uk/FERREIRD/

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
363
Abstract Views
3,039
rank
90,618
PlumX Metrics