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  5. Sequential Sampling by Individuals and Groups: An Experimental Study

American Economic Review: Insights

ISSN 2640-205X (Print) | ISSN 2640-2068 (Online)

Sequential Sampling by Individuals and Groups: An Experimental Study

  • Pëllumb Reshidi
  • Alessandro Lizzeri
  • Leeat Yariv
  • Jimmy Chan
  • Wing Suen
American Economic Review: Insights (Forthcoming)

Abstract

Many committees---juries, political task forces, etc.---spend time gathering costly information before reaching a decision. We report results from lab experiments focused on such dynamic information-collection processes, as in sequential hypothesis testing. We consider decisions governed by individuals and groups and compare how voting rules affect outcomes. Several insights emerge. First, average decision accuracies approximate those predicted theoretically, but these accuracies decline over time: participants display non-stationary behavior. Second, groups generate markedly different outcomes than individuals, with majority rule yielding faster and less accurate decisions. In particular, welfare is higher when sequential information is collected in groups using unanimity.

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