"This award is funded under the American Recovery and Reinvestment Act of 2009 (Public Law 111-5)."
It is widely believed that decisions arrived at by groups of decision makers are superior to those made by individuals, hence the common aphorism that "two heads are better than one." In prior research the Principal Investigators found that this is the case when the decisions involve strategic interactions with other groups or individuals.
Another type of situation where one might anticipate that groups would do better than individuals is in problems where once one member of the group gains the essential insight needed to solve the problem they can easily explain the answer to others (so called "eureka" type problems). In these situations, it would seem that the group should reach the same insight as fast as its best member would acting alone, or faster due to positive synergies (an "assembly bonus") among group members. However, research in the psychology literature shows that this is typically not the case. (Kerr and Tindale, 2004).
The proposed research tests several hypotheses as to why two heads appear better than one in strategic economic/business environments but not in the problem-solving domain. It also further explores the origins of group performance advantage and details the decision making processes used in strategic settings. To pursue these objectives, behavior of individuals and groups will be examined in several new, important, classes of problems (e.g., bidding in auctions and bargaining between groups of individuals).
