Speaker: Sebastian Fehrler (U Bremen)

Title: Too Good to be True – Individual and Collective Decision-Making with Misleading Signals (with A. Hochleitner and M. Janas)

When: Monday, 17 March 2025, 11:30 am – 13:00 pm

Where: Oskar-Morgenstern-Platz, lecture hall 7 (1st floor) (map)

Abstract:

This study is motivated by a peculiar ancient rule which highlights the need for thorough examination and dissent in decision-making processes. It is stated in the Babylonian Talmud and demands that if a defendant is unanimously convicted by all judges, they should be acquitted. In today’s world, too, there are many cases, where overwhelming evidence, such as fabricated customer reviews, can result in deceptive conclusions. We experimentally investigate individual and collective decision-making within information structures with correlated signals in one state of the world, where too much evidence has the potential to mislead, necessitating a level of sophistication for rational decision-making. Overall, participants’ performance is poor with only small differences in collective and individual decision-making accuracy. Interestingly, the more complex environment tends to encourage greater honesty within heterogeneous groups, as compared to the benchmark setting with independent signals, thus validating a rather subtle game-theoretic prediction.

The paper can be be found here.