In an experiment, we studied how small groups tackle a company takeover game, a task where participants deciding in isolation frequently exhibit the winner’s curse. We found that groups of three members, who could exchange opinions and chat, substantially reduced the winner's curse and...

It is still an open question when groups perform better than individuals in intellectual tasks. We report that in a company takeover experiment, groups placed better bids than individuals and substantially reduced the winner’s curse. This improvement was mostly due to peer pressure over the...

This paper studies how groups resolve disagreement in lottery choices. In an experiment, subjects submit individual proposals, exchange chat messages, and must reach unanimity. Overall, group choices are more coherent and closer to risk neutrality than individuals’. The proposal of the...

This paper reports an experiment that examines whether groups can make better decisions than individuals in contests. Our experiment replicates previous findings that individual players significantly overbid relative to theoretical predictions, incurring substantial losses. There is high...

This paper examines whether and how communication can help groups solve coordination and free-rider problems when they compete with another group for a public-good prize. We find that when group members make an anonymous individual decision on whether or not to contribute to the group success,...

This experimental study explores how communication influences efficiency, trust and trustworthiness in a small group when one member is left out of communication. To study this problem, we introduce a novel three-player trust game where player 1 can send any portion of his endowment to player 2....

Costless pre-play communication has been found to effectively facilitate coordination and enhance efficiency by increasing individual payoffs in games with Pareto-ranked equilibria. We report an experiment in which two groups compete in a weakest-link contest by expending costly efforts....

Schott et al. (2007) have shown that the “tragedy of the commons” can be overcome when individuals share their output equally in groups of optimal size and there is no communication. The assignment of individuals to groups as either strangers or partners does not significantly affect this...

Schott et al. (2007) have shown that the “tragedy of the commons” can be overcome when individuals share their output equally in groups of optimal size and there is no communication. In this paper we investigate the impact of introducing communication in groups that may or may not be linked...