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Are groups better planners than individuals? An experimental analysis

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  • Carbone, Enrica
  • Infante, Gerardo

Abstract

We present the results of an experiment comparing group and individual planning in the domain of lifecycle consumption/saving decisions. Individual decision making is compared to two group treatments, which differ based on the presence of a rematching rule. We find that individuals and groups differ in how they solve the intertemporal consumption problem, but not in how they improve their consumption planning within a sequence. Individuals’ performance improves across sequences, groups without rematching perform approximately the same, while groups with rematching do significantly worse. Our main finding is that while groups perform better than individuals in the first sequence, this difference seems to disappear in the second lifecycle. Results show that in the second sequence groups in the rematching treatment deviate substantially more from optimum than groups that are left stable across sequences.

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  • Carbone, Enrica & Infante, Gerardo, 2015. "Are groups better planners than individuals? An experimental analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 112-119.
    • Handle: RePEc:eee:soceco:v:57:y:2015:i:c:p:112-119
    DOI: 10.1016/j.socec.2015.04.006
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    Cited by:

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    2. José J. Domínguez, 2021. "The Effectiveness of Committee Quotas; The Role of Group Dynamics," ThE Papers 21/12, Department of Economic Theory and Economic History of the University of Granada..
    3. Enrica Carbone & Konstantinos Georgalos & Gerardo Infante, 2019. "Individual vs. group decision-making: an experiment on dynamic choice under risk and ambiguity," Theory and Decision, Springer, vol. 87(1), pages 87-122, July.
    4. Miller, Logan & Rholes, Ryan, 2023. "Joint vs. Individual performance in a dynamic choice problem," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 897-934.
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    6. Domínguez, José J., 2023. "Diversified committees in hiring processes: Lab evidence on group dynamics," Journal of Economic Psychology, Elsevier, vol. 97(C).
    7. J Dustin Tracy & Kevin A James & Hillard Kaplan & Stephen Rassenti, 2021. "An investigation of health insurance policy and behavior in a virtual environment," PLOS ONE, Public Library of Science, vol. 16(4), pages 1-26, April.

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    More about this item

    Keywords

    Collective decision making; Intertemporal consumer choice; Life cycle; Risk; Laboratory experiments;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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