Preliminaries

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Group Decision Making:
Cooperating
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Prospect
theory
• Reference point
– People appraise all
options in terms of
changes from current
wealth (the reference
point)
• Diminishing sensitivity
– Diminishing marginal
utility of changes from
the reference point
• Loss aversion
– losses loom larger than
gains
 Sunk cost
& Loss
aversion

A • Someone with a
‘sunk cost’
perspective starts
at B rather than A.
• Implications?
B -Dis-utility of loss
is perceived to be
lower – less
painful .
The endowment effect: Why?

Referent point theory: People

evaluate the potential change
as either being a gain or a loss.
In line with prospect theory,
changes that are framed as
losses are weighed more
heavily than are the changes
framed as gains.

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 Agenda

The wisdom of crowds and groups

Groups and honesty (reading)

Team decision traps

Collaborative Deciding
(promoting inquiry-based decisions)

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Why study group decision making

 Most laws, policies, and practices that affect our daily

lives, as well as the future course of society, are
determined by teams, committees, boards of directors,
and similar groups (rather than by single individuals)
 The purpose of group decision making is to decide on
well-considered, well-understood, realistic action
toward goals every member wishes to achieve
 How good the decisions are depends on how effective
the group is.

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 Advantages of group decisions

 Process gain: The interaction among group members

results in ideas, insights, and strategies that no one
member previously had thought of on his or her own
 Groups facilitate higher motivation to achieve
 Involvement in decision making increases commitment
to decision implementation
 Group diversity increases variety of available
resources
 Discussion enhances the quality of reasoning and
creativity

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 When are groups effective?

 The resources of group

members are fully utilized
 Time is well used
 The decision is implemented
fully by all the required group
members
 The problem-solving ability of
the group is improved, or at least
not lessened

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 Free riders

 Who are they?

– under-performers/slackers/free-riders

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 Group decisions?

 Our primary fear of team work:

– under-performers/slackers/free-riders

 The truth about team work:

– All of us, it seems, limit teamwork contributions at
least 50% of the time!

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 Social loafing

 The tendency of individuals to put forth less

effort when they are part of a group

 Social loafing is a behavior that organizations

want to eliminate. Understanding how and why
people become social loafers is critical to the
effective functioning, competitiveness and
effectiveness of an organization.

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 Social loafing: Why?

 Diffusion of responsibility
 Dispensability of effort
 "Sucker" effect
 Attribution and equity; matching of effort
 Submaximal goal setting

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 Social loafing: Research

 In both Chinese and American cultures, women loaf

less than men
 Individuals are more likely to loaf when their co-
workers are expected to perform well.
 Individuals reduce social loafing when working with
acquaintances and do not loaf at all when they work in
highly valued groups
 Collectivist thinking reduces the social loafing effect

(Karau & Williams, 1993)

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 Preventing social loafing

 Providing people with the freedom to seek

trustworthy partners and abandon free riders
helps to develop and safeguard cooperation
 But: cooperation is also an essential part of
corruption
– People often engage in corrupt collaboration - the
attainment of personal profits by joint acts of rule
violation
– https://www.fastcompany.com/3053000/volkswagens-cheat-software-
will-kill-59-people

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 Preventing social loafing
 Individual performance indicators
 Collaboration
– Get everyone involved in the group by assigning
each member special, meaningful tasks
 Content
– Identifies the importance each individual's specific
tasks within the group
 Choice
– Gives group members the opportunity to choose the
task they want to fulfil

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 (Gross, Leib, Offerman, & Shalvi, 2018)

Can partner selection corrupt?

 Working with other people leads

to more dishonesty than working
alone (e.g., Gino, Ayal, & Ariely,
2013; Weisel & Shalvi, 2015)
 Prosocial lies breed trust (Levine
& Schweitzer, 2015)
 Working with the same partner
over time increases bribery as
people develop trust (Abbink,
2004).

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 (Gross, Leib, Offerman, & Shalvi, 2018)

Research question

Are honest people

more likely
to leave their partners
when their partner
is dishonest
than when
the partner is honest?

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 (Gross, Leib, Offerman, & Shalvi, 2018)

Research results
 People tend to seek a partner in crime:
– Dishonest participants prefer partners who help
them secure the highest profit possible
– Dishonest people are more likely to ask to switch
partners when interacting with an honest partner
 Honest people also seek a partner in crime:
– Honest people systematically engage in ethical
free-riding
– Honest people are less likely to switch partners
when interacting with a dishonest partner

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 Biases in group decision making

 Biases that prevent us from

speaking up
 Biases that prevent us from
changing our mind
 Group dynamics that hinder
comprehensive information
processing

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 Biases that prevent us from
Speaking up
 Conformity: We change our views towards the
views of a majority group.
• E.g., if the majority thinks this way and I think another way,
I must be wrong.
 Self-censorship

 False consensus: We overestimate the extent

to which others share the same views.
• E.g., What I know is also what everyone else knows, so
there is no need to mention it.
 Illusion of unanimity

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 Biases that prevent us from
Changing our mind
 Naïve realism / fundamental attribution
error / egocentrism
– I see the world as it really is
– Other fair-minded and reasonable people
will share my views

– Those who do not share my views:

• Haven’t been told the truth
• Are too lazy or stupid to reach correct
interpretations and conclusions, or Collective
rationalization
• Are biased by their self-interest, dogma or Direct pressure
ideology. on dissenters

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 Biases that prevent us from

Comprehensive information processing

 Confirmation bias
– Discuss shared information but
not the unshared information

 Group centrism
Self-censorship
– Focus on group unity at the
expense of quality Illusion of
invulnerability
• E.g., avoid conflicts

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 Group think facilitators
 Over-estimation of the group:
– Illusions of invulnerability
– Illusions of morality
 Closedmindedness:
– Shared stereotypes of outsiders
– Collective rationalizations
 Pressure:
– Self censorship
– Direct pressure on dissenters
– Self-appointed mind-guards
– Illusions of unanimity

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A Classic Tale of Group Bias

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 Team traps

 Group polarization—the tendency for teams to

make more extreme decisions than would
individuals working alone.
 Deindividuation and diffusion of
responsibility—the tendency for individuals
within group settings to not feel personally
responsible for outcomes.
 Groupthink and The Abilene Paradox

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 Team traps

Group think

The tendency for

cohesive groups
to value consensus
over
decision quality.

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 Team traps
Abilene Paradox

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 The Abilene Paradox

Organizational decision making

The Abilene Organizations frequently take actions

Paradox in contradiction to what they really want
The tendency to do.
of groups They therefore defeat the very purposes
to make they are trying to achieve.
decisions The major corollary of the paradox
that individual is that the inability to manage
members agreement is a major source of
do not truly organization dysfunction.
support.

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 The Abilene Paradox

The dynamics

Action anxiety
Perceived risk and negative fantasies
Fear of separation
Real risk
Confusion of fantasy and reality
Blaming, fault-finding and resentment

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 Skip the trip to Abilene
 Constructive controversy
– Debates and intellectual watchdogs
 Composition of team
– Select members with complementary skills
 Challenge
– Significant performance goal
 Credit and commitment
– Sense of ownership & pride from accomplishments
 Collective & individual responsibility
– No finger pointing!
 Confidence
– Climate of transparency & trust

42 February 6, 2023
 Reducing group related biases
 Nominal group technique (Johnson & Johnson, 2012)
– Everyone take turns to express their thoughts and then
discuss every single thought thoroughly.
 Second-chance meeting (Johnson & Johnson, 2012)
– Hold a meeting after an initial agreement to allow members to
express remaining doubts and concerns
 Pre-mortem session (Kanhneman, Ch24)
– Ask members to imagine that the decision turns into a disaster
and explain why as detailed as possible (Prospective
hindsight)
 Inquiry approach (Garvin & Roberto, 2001)

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 (Garvin & Roberto, 2001)

Inquiry approach
Advocacy (!!) Inquiry (??)
Concept of decision
contest collaborative problem solving
making
Purpose of persuading &
testing & evaluating
discussion lobbying
Participants’ role spokespeople critical thinkers

persuade others present balanced arguments

Patterns of behavior defend position remain open to alternatives
downplay weakness accept constructive criticism
discouraged/dismisse
Minority views cultivated/valued
d
Outcomes winners & losers collective ownership

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Nugget of knowledge

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