The tragedy of the commons revisited: the importance of group decision-making

We use a laboratory experiment to compare the way groups and individuals behave in an inter-temporal common pool dilemma. The experimental design distinguishes between a non-strategic problem where players (individuals or groups of three) make decisions without interaction and a strategic part where players harvest from a common pool. This allows us to correct for differences between individuals and groups in the quality of decisions when testing for differences in competitiveness. The results show that groups are less myopic than individuals (i.e., they make qualitatively better decisions) but that they are more competitive than individuals when placed in a strategic setting. The net result is that groups make less efficient decisions in the strategic game than individuals do. We are able to show that this is caused by the median voter departing from her original preference in early periods with a shrinking pool (our groups decide by majority rule)