IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v144y2016icp25-28.html
   My bibliography  Save this article

Does group discussion lead to better informed and more strategic market entry decisions?

Author

Listed:
  • Murad, Zahra

Abstract

We investigate the possibility of group discussion serving as an implicit information channel to eliminate biased entry decisions into experimental markets. We find that groups are more informed than individuals in their beliefs. Nevertheless they make similarly biased market entry decisions failing to learn from feedback and repetition.

Suggested Citation

  • Murad, Zahra, 2016. "Does group discussion lead to better informed and more strategic market entry decisions?," Economics Letters, Elsevier, vol. 144(C), pages 25-28.
    • Handle: RePEc:eee:ecolet:v:144:y:2016:i:c:p:25-28
    DOI: 10.1016/j.econlet.2016.04.032
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176516301422
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2016.04.032?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-245, September.
    2. Martin G. Kocher & Matthias Sutter, 2005. "The Decision Maker Matters: Individual Versus Group Behaviour in Experimental Beauty-Contest Games," Economic Journal, Royal Economic Society, vol. 115(500), pages 200-223, January.
    3. Moore, Don A. & Cain, Daylian M., 2007. "Overconfidence and underconfidence: When and why people underestimate (and overestimate) the competition," Organizational Behavior and Human Decision Processes, Elsevier, vol. 103(2), pages 197-213, July.
    4. Sutter, Matthias, 2005. "Are four heads better than two? An experimental beauty-contest game with teams of different size," Economics Letters, Elsevier, vol. 88(1), pages 41-46, July.
    5. Radzevick, Joseph R. & Moore, Don A., 2008. "Myopic biases in competitions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 107(2), pages 206-218, November.
    6. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter.
    7. Ben Greiner, 2015. "Subject pool recruitment procedures: organizing experiments with ORSEE," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 1(1), pages 114-125, July.
    8. Ewers, Mara, 2012. "Information and Competition Entry," IZA Discussion Papers 6411, Institute of Labor Economics (IZA).
    9. Sutter, Matthias & Czermak, Simon & Feri, Francesco, 2013. "Strategic sophistication of individuals and teams. Experimental evidence," European Economic Review, Elsevier, vol. 64(C), pages 395-410.
    10. Daylian M. Cain & Don A. Moore & Uriel Haran, 2015. "Making sense of overconfidence in market entry," Strategic Management Journal, Wiley Blackwell, vol. 36(1), pages 1-18, January.
    11. Dan Lovallo & Colin Camerer, 1999. "Overconfidence and Excess Entry: An Experimental Approach," American Economic Review, American Economic Association, vol. 89(1), pages 306-318, March.
    12. Gary Charness & Matthias Sutter, 2012. "Groups Make Better Self-Interested Decisions," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 157-176, Summer.
    13. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Murad, Zahra & Starmer, Chris, 2021. "Confidence snowballing and relative performance feedback," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 550-572.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vincent Laferrière & David Staubli & Christian Thöni, 2023. "Explaining Excess Entry in Winner-Take-All Markets," Management Science, INFORMS, vol. 69(2), pages 1050-1069, February.
    2. Bruhin, Adrian & Santos-Pinto, Luís & Staubli, David, 2018. "How do beliefs about skill affect risky decisions?," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 350-371.
    3. Maria Karmeliuk & Martin G. Kocher & Georg Schmidt, 2022. "Teams and individuals in standard auction formats: decisions and emotions," Experimental Economics, Springer;Economic Science Association, vol. 25(5), pages 1327-1348, November.
    4. Brosig-Koch, Jeannette & Heinrich, Timo & Helbach, Christoph, 2014. "Does truth win when teams reason strategically?," Economics Letters, Elsevier, vol. 123(1), pages 86-89.
    5. Montero, Maria & Sheth, Jesal D., 2021. "Naivety about hidden information: An experimental investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 92-116.
    6. Fellner-Röhling, Gerlinde & Hromek, Kristijan & Kleinknecht, Janina & Ludwig, Sandra, 2023. "How to counteract biased self-assessments? An experimental investigation of reactions to social information," Journal of Economic Behavior & Organization, Elsevier, vol. 206(C), pages 1-25.
    7. David J. Cooper & Krista Saral & Marie Claire Villeval, 2021. "Why Join a Team?," Management Science, INFORMS, vol. 67(11), pages 6980-6997, November.
    8. Andrea Morone & Simone Nuzzo & Rocco Caferra, 2019. "The Dollar Auction Game: A Laboratory Comparison Between Individuals and Groups," Group Decision and Negotiation, Springer, vol. 28(1), pages 79-98, February.
    9. Faralla, Valeria & Borà, Guido & Innocenti, Alessandro & Novarese, Marco, 2020. "Promises in group decision making," Research in Economics, Elsevier, vol. 74(1), pages 1-11.
    10. Danková, Katarína & Servátka, Maroš, 2019. "Gender robustness of overconfidence and excess entry," Journal of Economic Psychology, Elsevier, vol. 72(C), pages 179-199.
    11. Lahav, Yaron, 2015. "Eliciting beliefs in beauty contest experiments," Economics Letters, Elsevier, vol. 137(C), pages 45-49.
    12. Lohse, Tim & Simon, Sven A., 2021. "Compliance in teams – Implications of joint decisions and shared consequences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 94(C).
    13. Ayala Arad & Kevin P. Grubiak & Stefan P. Penczynski, 2024. "Does communicating within a team influence individuals’ reasoning and decisions?," Experimental Economics, Springer;Economic Science Association, vol. 27(1), pages 109-129, March.
    14. Axel Franzen & Sonja Pointner, 2013. "Giving according to preferences: Decision-making in the group dictator game," University of Bern Social Sciences Working Papers 2, University of Bern, Department of Social Sciences, revised 24 Jan 2014.
    15. Auerswald, Heike & Schmidt, Carsten & Thum, Marcel & Torsvik, Gaute, 2018. "Teams in a public goods experiment with punishment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 72(C), pages 28-39.
    16. Folli, Dominik & Wolff, Irenaeus, 2022. "Biases in belief reports," Journal of Economic Psychology, Elsevier, vol. 88(C).
    17. Haoran He & Marie Claire Villeval, 2014. "Are teams less inequality averse than individuals?," Post-Print halshs-01077253, HAL.
    18. Cox, Caleb A. & Stoddard, Brock, 2018. "Strategic thinking in public goods games with teams," Journal of Public Economics, Elsevier, vol. 161(C), pages 31-43.
    19. Cheung, Stephen L. & Johnstone, Lachlan, 2017. "True Overconfidence, Revealed through Actions: An Experiment," IZA Discussion Papers 10545, Institute of Labor Economics (IZA).
    20. Fochmann, Martin & Fochmann, Nadja & Kocher, Martin G. & Müller, Nadja, 2021. "Dishonesty and risk-taking: Compliance decisions of individuals and groups," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 250-286.

    More about this item

    Keywords

    Experimental market entry games; Group decision making; Information;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:144:y:2016:i:c:p:25-28. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.