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Revealing the Economic Consequences of Group Cohesion

Author

Listed:
  • Simon Gaechter

    (School of Economics, University of Nottingham)

  • Chris Starmer

    (School of Economics, University of Nottingham)

  • Fabio Tufano

    (School of Economics, University of Nottingham)

Abstract

We introduce the concept of 'group cohesion' to capture the economic consequences of ubiquitous social relationships in group production. We measure group cohesion, adapting the 'oneness scale' from psychology. A comprehensive program of new experiments reveals the considerable economic impact of cohesion: higher cohesion groups are significantly more likely to achieve Pareto-superior outcomes in classic weak-link coordination games. We show that effects of cohesion are economically large, robust, and portable. We identify social preferences as a primary mechanism explaining the effects of cohesion. Our results provide proof of concept for group cohesion as a productive new tool of economic research.

Suggested Citation

  • Simon Gaechter & Chris Starmer & Fabio Tufano, 2017. "Revealing the Economic Consequences of Group Cohesion," Discussion Papers 2017-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    • Handle: RePEc:not:notcdx:2017-09
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    References listed on IDEAS

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    1. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, June.
    2. Reuben, Ernesto & van Winden, Frans, 2008. "Social ties and coordination on negative reciprocity: The role of affect," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 34-53, February.
    3. Simon Gächter & Eric J. Johnson & Andreas Herrmann, 2022. "Individual-level loss aversion in riskless and risky choices," Theory and Decision, Springer, vol. 92(3), pages 599-624, April.
    4. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    5. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 811-846.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    6. repec:dgr:uvatin:20040098 is not listed on IDEAS
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    Cited by:

    1. Gabriele Chierchia & Fabio Tufano & Giorgio Coricelli, 2018. "Friends or Strangers? Strategic Uncertainty and Coordination across Experimental Games of Strategic Complements and Substitutes," Discussion Papers 2018-01, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    2. Robson, Matthew, 2021. "Inequality aversion, self-interest and social connectedness," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 744-772.
    3. Castillo, Geoffrey, 2021. "Preference reversals with social distances," Journal of Economic Psychology, Elsevier, vol. 86(C).
    4. Thom, James Matthew & Afzal, Uzma & Gold, Natalie, 2022. "Testing team reasoning: Group identification is related to coordination in pure coordination games," Judgment and Decision Making, Cambridge University Press, vol. 17(2), pages 284-314, March.
    5. repec:cup:judgdm:v:17:y:2022:i:2:p:284-314 is not listed on IDEAS

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    More about this item

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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