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  3. American Economic Review
  4. June 2005
  5. Are Two Heads Better Than One? Team versus Individual Play in Signaling Games

Are Two Heads Better Than One? Team versus Individual Play in Signaling Games

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Abstract

We compare individuals with two-person teams in signaling game experiments. Teams consistently play more strategically than individuals and generate positive synergies in more difficult games, beating a demanding "truth-wins" norm. The superior performance of teams is most striking following changes in payoffs that change the equilibrium outcome. Individuals play less strategically following the change in payoffs than inexperienced subjects playing the same game. In contrast, the teams exhibit positive learning transfer, playing more strategically following the change than inexperienced subjects. Dialogues between teammates are used to identify factors promoting strategic play.

Citation

Cooper, David, J., and John H. Kagel. 2005. "Are Two Heads Better Than One? Team versus Individual Play in Signaling Games." American Economic Review, 95 (3): 477-509. DOI: 10.1257/0002828054201431

Additional Materials

JEL Classification

  • C72 Noncooperative Games
  • D82 Asymmetric and Private Information; Mechanism Design