Group decisions

Franz Eisenführ (), Martin Weber and Thomas Langer ()
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Thomas Langer: University of Münster

Chapter Chapter 12 in Rational Decision Making, 2010, pp 345-370 from Springer

Abstract: Summary In this chapter, we discuss group decisions based on objectives and expectations jointly set by the group members. In decision making processes within groups, issues frequently appear which affect the rationality of the process. Jointly structuring a decision problem creates a higher level of procedural rationality than voting on given alternatives after an unstructured discussion. This tends to make a problem more transparent and curb the influence of “illegitimate” interests If the group is not able to agree on specific values (like probabilities or the weighting of objectives), one can either aggregate the individual values mathematically or make the group agree on a certain interval, accepting to continue working with incomplete information. An efficient possibility to aggregate probability estimations made by experts is given by so-called prediction markets. On these markets, experts receive monetary incentives to trade according to their probability predictions. After the components of the decision problem have been determined, a solution can be found entirely analogously to the case of an individual decision. The alternative to joint structuring is that each person states their own preferences concerning the alternatives. These individual preferences are then transformed into a group preference, either by aggregating the individual utility functions or by voting on the given alternatives.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-02851-9_12

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DOI: 10.1007/978-3-642-02851-9_12

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