The tragedy of the commons revisited: The importance of group decision-making

Abstract

Abstract:We use a laboratory experiment to compare the way groups and individuals behave in an inter-temporal common pool dilemma. The experimental design distinguishes between a non-strategic problem where players (individuals or groups of three) make decisions without interaction and a strategic part where players harvest from a common pool. This allows us to correct for differences between individuals and groups in the quality of decisions when testing for differences in competitiveness. Group decisions are either made by majority rule or unanimity. The results show that groups are less myopic than individuals (i.e., they make qualitatively better decisions) but that they are more competitive than individuals when placed in a strategic setting. The net result for groups deciding by majority rule is that they make less efficient decisions in the strategic game than individuals do. We are able to show that this is caused by the median voter departing from her original preference in early periods with a shrinking pool. When groups have to make unanimous decisions they start playing the strategic game more efficiently then individuals do, but they rapidly become more competitive with repetition of the game.

Cartel formation and pricing: The effect of managerial decision-making rules

“…Using a common pool environment, Gillet et al (2009) support this finding of higher competitiveness amongst groups.…”

“…One can therefore not simply assume that findings for individual participants in an experiment automatically hold for group decision contexts. Moreover, when decisions are made by groups, the procedure by which they decide may have an important impact on the decision (Bornstein et al 2004;Gillet et al 2009). We will therefore not only distinguish between decisions made by individuals and by groups but in the latter case also consider distinct group decision making rules.…”

“…Blinder & Morgan (2005) find that majority and consensus groups behave practically indistinguishable in their monetary policy experiment. In the Gillet et al (2009) common pool environment, the higher competitiveness by groups holds both when decisions are made by consensus and when they are need to consider another way in which groups make decisions. In the case of firm decision making, decisions are often made by a single individual, the CEO.…”

Same process, different outcomes: group performance in an acquiring a company experiment

“…Cooper and Kagel (2005) randomly select one member's proposal as the group choice. Blinder and Morgan (2005) and Gillet et al (2009) either implement a majority rule or give members no time limit to reach a unanimous decision. Kocher and Sutter (2007) is the most closely related paper with a veto power feature.…”

Altruistic Norm Enforcement and Decision-Making Format in a Dilemma: Experimental Evidence

“…Second, a large body of the literature suggests that a joint decision-making process may make people more rational in a number of settings, including ultimatum games, beauty-contest games, signalling games, and centipede games (see, for example, Charness and Sutter (2012) and Kugler et al (2012) for a survey), although they could behave more cooperatively if reputation concerns are strong in repeated setups (e.g., Gillet et al 2009, Kamei 2016, Müller and Tan 2013. If twoperson pairs behave more like a game theorist in our experiment, pairs would decrease their willingness to punish through communication.…”