Group versus individual
decision-making
Is there a shift?
Attila Ambrus
Ben Greiner
Parag Pathak
Motivation
• Many important decisions in group context:
committees, governing bodies, juries,
partners, teams, families.
• If these decisions cannot be explained as
aggregation of individual choices, need to
rethink if we can take individuals as the unit
of analysis.
Motivation (cont.)
• Large literature in social psychology, and recent
literature on economics: do people behave
differently in groups than in isolation?
• Intellective tasks (Laughlin, 1980): informational
reasons why people behave differently.
• Nonintellective tasks (no normative criterion for
evaluating decisions): no informational reason.
Motivation (cont.)
• Stoner (1961): group shifts in lottery choices;
cautious shifts; later research finds risky
shifts.
• Selfish shift: Pylyshyn et al. (1966); later
research verified it in PD games, centipede
games, ultimatum games, gift-exchange
games, ultimatum games.
• Moscovini and Zavalloni (1969): group
polarization/discontinuity effect.
General explanations for group shift
• Social comparison theory (Levinger and Schneider
(1969)): people behave in group settings differently
because motivated to perceive and present
themselves in socially desireable way.
• Persuasive argument theory (Burnstein et al.
(1973)): pool of arguments in one direction more
persuasive; alternative: people with certain
preferences more persuasive.
Explanations in particular contexts
• In-group vs out-group sentiments (Tajfel et al
(1971), Charness, Rigotti and Rustichini
(2007).
• Identifiability explanation/personal
responsibility (Wallach et al. (1964))
• Eliaz, Ray and Razin (2005): group shift for
non expected utility maximizers in lottery
choices along lines of Allais paradox.
Our main point
• Point out that whether group shift cannot be
mechanically determined based on
comparing distributions of individual and
group decisions.
• Need theory of how individual opinions
aggregated at group level, since different
theories predict different distributions of
group choices, for given distribution of
individual choices.
Main point (cont.)
• Example: single-peaked preferences and majority
voting: median voter’s decision adopted by group
(Moulin, 1980).
• If distribution of preferences in population
asymmetric: population median differs from
population mean – average group decisions differ
from average individual decisions in systematic
manner.
• Right question: is there shift wrt group decisions
predicted by aggregation theory (median if singlepeaked preferences)?
Experimental Design
• Gift-exchange game (Fehr, Kirchsteiger & Riedl,
1993; Brandts and Charness, 2004)
– First mover sends amount between 1 and 10 tokens to
second mover
– Amount tripled on the way
– Second mover observes amount, then decides about how
many tokens (1-10) to send to first mover
– Amount tripled on the way
• Lottery choices (Holt & Laury, 2002)
– Decision-maker chooses between pairs of lotteries, e.g.
A: $11.50 with 60% and $0.30 with 40%
OR
B: $ 6.00 with 60% and $4.80 with 40%
– 10 choices over the full range of percentages Æ switching
point between A and B Æ measure of risk attitude
Experimental Design
N groups of 5
persons each
• Gift exchange
• Gift exchange
• Lotteries
--> Reshuffle
• Gift exchange
• Gift exchange
• Lotteries
--> Reshuffle
• Gift exchange
• Gift exchange
• Lotteries
each decision first individually,
then jointly as a group
Treatment A: Voting
Treatment B: Free discussion
6 individual
first movers
each making
N gifts
Design (cont.)
• Important that group and individual choices
solicited for same decision (both apply to
same set of people).
• Charness et al. (2007), Chen and Li (2009),
Sutter (2009) show individual decisions
effected by applying only to the individual or
to a group containing the individual.
Treatments I.
• No deliberation: group members cannot talk
to each other, but see each other; group
decision determined by public majority
voting.
No possibility for persuasion, but social
comparison theory might still apply.
Treatments II
• Deliberation: unlimited group discussion; free
to decide how to make group decision. Here
persuasive argument theory can be tested,
too.
The two most popular treatments in
literature; differ in multiple dimensions so we
analyze them separately. Possibility of inbetween treatment.
Hypotheses
• Mean hypothesis: β1= β2= β3= β4= β5
strong: β1= β2= β3= β4= β5= 1
• Median hypothesis: β1= β2= β4= β5= 0, β3 > 0
strong: β1= β2= β4= β5= 0, β3= 1
• Shift hypothesis: α > 0
Results
No deliberation
Sessions
1
Participants
30 + 6
Different groups
18
Gift exchange 2nd mover decisions
individuals
180
groups
36
Deliberation
4
55 + 11
33
330
66
Binary lottery choices
individuals
groups
900
180
1650
330
Table 6 missing
• See it in paper
Gift Exchange Results
Deliberation
-0.15
0.02
No
Delibdeliberation eration
intercept
lowest
No
deliberation
-0.36
0.01
0.00
0.06
second
third
fourth
highest
0.02
0.76***
-0.03
0.23*
0.39***
0.51***
0.12
0.02
0.05
0.73***
-0.01
0.23*
0.61***
0.24***
0.03
0.10
0.87
66
plus Phase Fixed Effects
0.99
0.88
36
66
R2
N
0.96
36
Interpretation of results
• Findings provide evidence against social
comparison theory in contexts we
investigated.
• Findings in line with predictions of persuasive
argument theory.
• Extreme group members don’t seem to have
influence on group decisions; people close to
the median can have an effect, to different
extent in different directions.
Gift Exchange Results
Figure 1: Comparison of Group Trust Game Decision to Mean and Median
10
9
mean
8
7
6
median
5
4
3
2
1
0
0
1
2
3
4
5
Predicted Decision
6
7
8
9
10
Lottery results
In 96% cases
Median becomes group
Share of "risky" choices
1.00
No deliberation - Individuals
0.90
No deliberation - Groups
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
1
2
3
4
5
6
7
8
9
10
Lottery choice
Lottery results
Share of "risky" choices
1.00
Deliberation - Individuals
0.90
Deliberation - Groups
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
1
2
3
4
5
6
7
8
9
10
Lottery choice
Lottery results
• Share of “risky” choices
Lottery
1
2
3
4
5
6
7
8
9
10
No deliberation
ind. groups gr=med
0.00
0.00
1.00
0.00
0.00
1.00
0.00
0.00
1.00
0.00
0.00
1.00
0.22
0.11
0.94
0.39
0.33
0.78
0.63
0.78
1.00
0.92
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
ind.
0.01
0.01
0.01
0.02
0.05
0.27
0.58
0.85
0.96
0.97
Deliberation
groups gr=med
0.00
1.00
0.00
1.00
0.00
1.00
0.00
1.00
0.03
0.97
0.15
0.88
0.58
0.82
0.94
0.91
1.00
1.00
1.00
1.00
Lottery Results: Gender
male
econ
age
Individual decision
Group decision
0.047***
0.050*** first
0.09
0.00
-0.006
first
*female -0.12
5
-0.002 0.000
second
-0.02
second *female 0.68***
third
0.55***
third
*female -0.05
fourth
0.30***
fourth *female -0.39**
fifth
0.08*
fifth
*female -0.12
R2-Adj 0.81
N
1650
0.81 0.81 0.81
1650 1620 1620
R2-Adj
N
0.92
330
Summary and Conclusions
• Importance of reexamining results on group shift,
relative to theories of preference aggregation.
• Median hypothesis can explain at least part of the
group shift findings.
• Can explain why different shifts observed in same
type of choice (risky vs safe shifts)
• Can explain why group shifts tend to occur in
direction of original inclination of subjects (Brown,
1986), and why less likely to occur when two
roughly equal sized sets of people predisposed in
two directions (Sunstein, 2000).