Universität zu Köln

Fahr, Rene and Irlenbusch, Bernd ORCID: 0000-0002-3433-2826 (2011). Who follows the crowd-Groups or individuals? J. Econ. Behav. Organ., 80 (1). S. 200 - 210. AMSTERDAM: ELSEVIER. ISSN 1879-1751

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Abstract

In games of social learning individuals tend to give too much weight to their own private information relative to the information that is conveyed by the choices of others (Weizsacker, 2010). In this paper we investigate differences between individuals and small groups as decision makers in information cascade situations. In line with results from social psychology as well as results on Bayesian decision making (Charness et al., 2006) we find that groups behave more rationally than individuals. Groups, in particular, are able to abandon their own private signals more often than individuals when it is rational to do so. Our results indicate that the intellective part of the decision task contributes slightly more to the superior performance of groups than the judgmental part. Our findings have potential implications for the design of decision making processes in organisations, finance and other economic settings. (C) 2011 Elsevier B.V. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Fahr, Rene UNSPECIFIED UNSPECIFIED UNSPECIFIED Irlenbusch, Bernd UNSPECIFIED orcid.org/0000-0002-3433-2826 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-489414
DOI:	10.1016/j.jebo.2011.03.007
Journal or Publication Title:	J. Econ. Behav. Organ.
Volume:	80
Number:	1
Page Range:	S. 200 - 210
Date:	2011
Publisher:	ELSEVIER
Place of Publication:	AMSTERDAM
ISSN:	1879-1751
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB Faculty of Management, Economics and Social Sciences > Business Administration > Corporate Development > Professorship for Business Administration, Corporate Development and Business Ethics
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language INFORMATION CASCADES; HERD BEHAVIOR; OTHERS; BEAUTY; FADS Multiple languages Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/48941