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Are Two Heads Better than One?: An Experimental Analysis of Group vs. Individual Decisionmaking

Author

Listed:
  • Alan S. Blinder

    (Princeton University)

  • John Morgan

    (Princeton University)

Abstract

Two laboratory experiments – one a statistical urn problem, the other a monetary policy experiment – were run to test the commonly-believed hypothesis that groups make decisions more slowly than individuals do. Surprisingly, this turns out not to be true there is no significant difference in average decision lags. Furthermore, and also surprisingly, there is no significant difference in the decision lag when groups decisions are made by majority rule versus when they are made under a unanimity requirement. In addition, group decisions are on average superior to individual decisions. The results are strikingly similar across the two experiments.

Suggested Citation

  • Alan S. Blinder & John Morgan, 2000. "Are Two Heads Better than One?: An Experimental Analysis of Group vs. Individual Decisionmaking," Working Papers 2000-1, Princeton University. Economics Department..
    • Handle: RePEc:pri:econom:2000-1
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    File URL: http://www.princeton.edu/~blinder/papers/00NBER7909.pdf
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    References listed on IDEAS

    as
    1. Glenn Rudebusch & Lars E.O. Svensson, 1999. "Policy Rules for Inflation Targeting," NBER Chapters, in: Monetary Policy Rules, pages 203-262, National Bureau of Economic Research, Inc.
    2. Laurence Ball, 1999. "Efficient Rules for Monetary Policy," International Finance, Wiley Blackwell, vol. 2(1), pages 63-83, April.
    3. John B. Taylor, 1999. "Monetary Policy Rules," NBER Books, National Bureau of Economic Research, Inc, number tayl99-1.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Monetary Policy; Decision Making;

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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