Topic
Groupshift
About: Groupshift is a research topic. Over the lifetime, 22 publications have been published within this topic receiving 1477 citations.
Papers
TL;DR: It is shown that under most conditions, the costs to subordinate group members, and to the group as a whole, are considerably higher for despotic than for democratic decisions.
Abstract: Groups of animals often need to make communal decisions, for example about which activities to perform, when to perform them and which direction to travel in; however, little is known about how they do so. Here, we model the fitness consequences of two possible decision-making mechanisms: 'despotism' and 'democracy'. We show that under most conditions, the costs to subordinate group members, and to the group as a whole, are considerably higher for despotic than for democratic decisions. Even when the despot is the most experienced group member, it only pays other members to accept its decision when group size is small and the difference in information is large. Democratic decisions are more beneficial primarily because they tend to produce less extreme decisions, rather than because each individual has an influence on the decision per se. Our model suggests that democracy should be widespread and makes quantitative, testable predictions about group decision-making in non-humans.
541 citations
TL;DR: In this article, the authors describe what economists have learned about differences between group and individual decision-making, and compare individual decision making to group decision making, and to individual to individual.
Abstract: In this paper, we describe what economists have learned about differences In this paper, we describe what economists have learned about differences between group and individual decision-making. This literature is still young, and in between group and individual decision-making. This literature is still young, and in this paper, we will mostly draw on experimental work (mainly in the laboratory) that this paper, we will mostly draw on experimental work (mainly in the laboratory) that has compared individual decision-making to group decision-making, and to individual has compared individual decision-making to group decision-making, and to individual
462 citations
TL;DR: In this paper, the authors examine the question of whether an individual makes decisions that reflect the risk preferences of the party bearing the consequences in a sealed-bid auction and find that when the individual makes a decision for an anonymous stranger, there is a tendency to exhibit less risk aversion.
Abstract: Decisions with uncertain outcomes are often made by one party in settings where another party bears the consequences. Whenever an individual is delegated to make decisions that affect others, such as in the typical corporate structure, does the individual make decisions that reflect the risk preferences of the party bearing the consequences? We examine this question in two simple settings, lottery choices and sealed-bid auctions, using controlled laboratory experiments. We find that when an individual makes a decision for an anonymous stranger, there is a tendency to exhibit less risk aversion. This reduction in risk aversion is relative to his or her own preferences, and it is also relative to his or her belief about the preferences of others. This result has significant implications for the design of contracts between principals and agents.
250 citations
TL;DR: In this article, the authors implement a risk experiment that allows for judgment errors to investigate who makes mistakes and whether it matters, and they find that risk aversion alone does not explain financial decisions, risk aversion and inconsistent choices interact in significant and sensible ways.
Abstract: We implement a risk experiment that allows for judgment errors to investigate who makes mistakes and whether it matters. The experiments are conducted with a random sample of the adult population in Rwanda, and data on financial decisions are collected. We find a high proportion of inconsistent choices, with over 50% of the participants making at least one mistake. Importantly, errors are informative. While risk aversion alone does not explain financial decisions, risk aversion and inconsistent choices interact in significant and sensible ways. As we would expect, risk-averse individuals are more likely to belong to a savings group and less likely to take out an informal loan. For those more likely to make mistakes, however, as they become more risk averse, they are less likely to belong to a savings group and more likely to take up informal credit, suggesting that mistakes correlate with less than optimal behavior.
183 citations
TL;DR: In this article, the authors experimentally study the willingness of men and women to make risky decisions on behalf of a group, and find that women tend to take more risk for the group than men.
Abstract: Being the leader in a group often involves making risky decisions that affect the payoffs of all members, and the decision to take this responsibility in a group is endogenous in many contexts. In this paper, we experimentally study: (1) the willingness of men and women to make risky decisions on behalf of a group, (2) the amount of risk men and women take for the group, in comparison to their individual decisions. We observe a striking difference between males and females, with a much lower fraction of women being willing to make the group decision than men. The amount of risk taken for the group is generally lower than in the case where subjects decide for themselves only, indicating a cautious shift. The women that would like to make the group decision and the women that do not are no different in terms of how much risk they take for themselves, nor for their group. For men, on the other hand, we find that the ones who would like to lead tend to take more risk on behalf of the group.
182 citations
Related Topics (5)
Performance Metrics
| Year | Papers |
|---|---|
| 2017 | 1 |
| 2016 | 2 |
| 2015 | 1 |
| 2012 | 2 |
| 2011 | 3 |
| 2009 | 2 |