Committees Versus Individuals : An Experimental Analysis of Monetary Policy Decision-Making

This article reports the results of an experimental analysis of monetary policy decision-making under uncertainty. The experiment used a large sample of economically literate undergraduate and postgraduate students from the London School of Economics to play a simple monetary policy game, both as individuals and in committees of five players. The result - that groups made better decisions than individuals - accords with a previous study in the United States with Princeton University students. The experiment also attempted to establish why group decision-making is superior: although some of the improvement was related to committees using majority voting when making decisions, there was a significant additional committee benefit associated with members being able to observe each other's voting behaviour