Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Bergen, Department of Economics

No 08/13: Teams punish less

Heike Auerswald (), Carsten Schmidt (), Marcel Thum () and Gaute Torsvik ()
Additional contact information
Heike Auerswald: Faculty of Business and Economics, Technical University Dresden
Carsten Schmidt: University of Mannheim
Marcel Thum: Faculty of Business and Economics, Technical University Dresden,
Gaute Torsvik: University of Bergen

Abstract: Many decisions in politics and business are made by teams rather than by single individuals. In contrast, economic models typically assume an individual rational decision maker. A rapidly growing body of (experimental) literature investigates team decisions in different settings. We study team decisions in a public goods contribution game with a costly punishment option and compare it to the behavior of individuals in a laboratory experiment. We also consider different team decision-making rules (unanimity, majority). We find that teams contribute significantly more and punish less than individuals, regardless of the team decision rule. Overall, teams yield higher payoffs than individuals.

Keywords: Group Decision Making; Public Good; Experiment; Punishment

JEL-codes: H54; Q54; Q58

21 pages, October 18, 2013

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