group versus individual decision-making is there a shift.pdf

Group versus individual decision-making: Is there a shift? ? Attila Ambrus ? Ben Greiner ? Parag Pathak § This Version: May 2009 Abstract We revisit the phenomenon that group decisions di?er systematically from decisions of individuals. Our experiment solicits individual and group decisions from the same subjects in two settings, gift-exchange games and lottery choices. With no deliberation and voting,the group decision is determined by the median individual decision, without a shift. With deliberation but no imposed decision rule, the individual one po- sition towards the sel?sh direction also es in?uential. In lottery choices we ?nd no group shift relative to the median. We demonstrate that the standard practice paring means of group and individual decisions would incorrectly identify a level shift. ?We thank the Warburg foundation for ?nancial support and Niels Joaquin for valuable research assistance. Eric Budish, y Egorov, Lars Ehlers, and Mihai Manea provided assistance in some of the experimental sessions. Ignacio Esponda, Drew Fudenberg, Stephen Leider, Muriel Niederle, Weizsacker and seminar participants at the IAS in Princeton provided ments. ?Department of Economics, Harvard University, ambrus AT ?School of Economics, University of New South Wales, bgreiner AT §Department of Economics, MIT, ppathak AT 1 1 Introduction Many important decisions in the society are made by groups ofindividuals such mittees, governing bodies, juries, business partners, teams, and families. Experiments in various contexts demonstrate systematic di?erences between choices made by groups of individuals and by individuals making decisions in isolation. There is a large literature in social psychologydocumenting and an- alyzing this phenomenon, referring to it as the “discontinuity e?ect” or “group shift”, and a relatively recent literature in economics investigating it both ex- perimentally and theoretically. 1 Some of the experiments feature