The Effect of Perceived Competence and Competitive Environment on Team Decision-Making in the Hidden-Profile Paradigm

Complex decision-making in organizations is a process frequently assigned to teams. An expected benefit of utilizing teams is that, due to an expanded pool of available information, outcomes may be superior to those of an individual decision-maker. However, research using the Hidden-Profile Paradigm (i.e., a research design where each team member has information that must be shared to arrive at an accurate solution) has consistently shown that team members regularly fail to exploit their unique information to produce accurate decisions. This failure may be due to a combination of social, individual, and contextual factors, information processing inaccuracies, and cognitive biases. The current study sought to determine whether individuals’ perception of competence relative to other team members influences information sharing and decision accuracy in hidden-profiles. Further, the interactive effects of competitive versus cooperative environmental factors were examined. Two-person teams were assembled to solve a hidden-profile task. Team members were led to believe that they were either more or less competent than their team-mate, and instructed to either cooperate or compete with one another. Results indicated that teams comprising individuals who perceived themselves as relatively less competent shared more information; however, decision accuracy was found to be better only under a cooperative environment. In addition, intention to strategically withhold information from one’s team-mate was found to be higher for teams under a competitive environment. The study has implications for hidden-profile research and for team decision-making in organizations.