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Revealing the Economic Consequences of Group Cohesion

Author

Listed:
  • Gächter, Simon

    (University of Nottingham)

  • Starmer, Chris

    (University of Nottingham)

  • Tufano, Fabio

    (University of Nottingham)

Abstract
We introduce the concept of "group cohesion" to capture the economic consequences of ubiquitous social relationships in group production. We measure group cohesion, adapting the "oneness scale" from psychology. A comprehensive program of new experiments reveals the considerable economic impact of cohesion: higher cohesion groups are significantly more likely to achieve Pareto-superior outcomes in classic weak-link coordination games. We show that effects of cohesion are economically large, robust, and portable. We identify social preferences as a primary mechanism explaining the effects of cohesion. Our results provide proof of concept for group cohesion as a productive new tool of economic research.

Suggested Citation

  • Gächter, Simon & Starmer, Chris & Tufano, Fabio, 2017. "Revealing the Economic Consequences of Group Cohesion," IZA Discussion Papers 10824, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10824
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    References listed on IDEAS

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    1. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, June.
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    5. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 811-846.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    6. repec:dgr:uvatin:20040098 is not listed on IDEAS
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    Cited by:

    1. Robson, Matthew, 2021. "Inequality aversion, self-interest and social connectedness," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 744-772.
    2. Castillo, Geoffrey, 2021. "Preference reversals with social distances," Journal of Economic Psychology, Elsevier, vol. 86(C).
    3. Thom, James Matthew & Afzal, Uzma & Gold, Natalie, 2022. "Testing team reasoning: Group identification is related to coordination in pure coordination games," Judgment and Decision Making, Cambridge University Press, vol. 17(2), pages 284-314, March.
    4. Gabriele Chierchia & Fabio Tufano & Giorgio Coricelli, 2018. "Friends or Strangers? Strategic Uncertainty and Coordination across Experimental Games of Strategic Complements and Substitutes," Discussion Papers 2018-01, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    5. repec:cup:judgdm:v:17:y:2022:i:2:p:284-314 is not listed on IDEAS

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    More about this item

    Keywords

    weak-link game; coordination; oneness; group cohesion; social relationships; experiments; real groups;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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