The Decision Maker Matters: Individual Versus Group Behaviour in Experimental Beauty-Contest Games

24 Pages Posted: 28 Dec 2004

See all articles by Martin G. Kocher

Martin G. Kocher

Ludwig Maximilian University of Munich - Faculty of Economics; Institute for Advanced Studies (IHS) - Department of Economics & Finance; Göteborg University - School of Business, Economics and Law; Queensland University of Technology - School of Economics and Finance

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; University of Cologne - Department of Economics

Abstract

Economics has devoted little attention to whether the type of decision maker matters for economic decisions. However, many important decisions like those on monetary policy or a company's business strategy are made by (small) groups rather than an individual. We compare behaviour of individuals and small groups in an experimental beauty-contest game. Our findings suggest that groups are not smarter decision makers per se but that they learn faster than individuals. When individuals compete against groups, the latter significantly outperform the former in terms of payoff.

Suggested Citation

Kocher, Martin G. and Sutter, Matthias, The Decision Maker Matters: Individual Versus Group Behaviour in Experimental Beauty-Contest Games. Economic Journal, Vol. 115, No. 500, pp. 200-223, January 2005. Available at SSRN: https://ssrn.com/abstract=639750

Martin G. Kocher (Contact Author)

Ludwig Maximilian University of Munich - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

Institute for Advanced Studies (IHS) - Department of Economics & Finance ( email )

Stumpergasse 56
A-1060 Vienna, A-1060
Austria

Göteborg University - School of Business, Economics and Law ( email )

Vasagatan 1
Goteborg, 40530
Sweden

Queensland University of Technology - School of Economics and Finance ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

University of Cologne - Department of Economics

Cologne, 50923
Germany

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