Individual versus group behavior and the role of the decision making procedure in gift-exchange experiments

We test for behavioral differences between groups and individuals in giftexchange experiments. Related studies establish group behavior as typically closer to the game-theoretic equilibrium. We show that this result may depend crucially on the decision making procedure within groups. A novel decision making protocol opens up the black box of group decision making and allows to track important features of the group interaction process. We are able to show that the mere fact of being a group member shifts initial individual choices towards the game-theoretic equilibrium. JEL classification: C72, C91, C92, D70