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The Decision Maker Matters: Individual Versus Group Behaviour in Experimental Beauty-Contest Games* 


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    We would like to thank Colin Camerer, David de Meza, Rosemarie Nagel, Rupert Sausgruber, four anonymous referees, conference participants at the annual meetings of the Royal Economic Society 2001, European Economic Association 2001, Canadian Economic Association 2001, Economic Science Association 2001 and European Public Choice Society 2001, as well as seminar participants at CentER, Tilburg University for many helpful suggestions and comments. All errors are ours, of course. Financial assistance by the Royal Economic Society's Small Budget Scheme, the Gesellschaft fuer Experimentelle Wirtschaftsforschung and the Center for Experimental Economics at the University of Innsbruck (sponsored by Raiffeisen Landesbank Tirol) is gratefully acknowledged.


Economics has devoted little attention to whether the type of decision maker matters for economic decisions. However, many important decisions like those on monetary policy or a company's business strategy are made by (small) groups rather than an individual. We compare behaviour of individuals and small groups in an experimental beauty-contest game. Our findings suggest that groups are not smarter decision makers per se but that they learn faster than individuals. When individuals compete against groups, the latter significantly outperform the former in terms of payoff.