Does Truth Win When Teams Reason Strategically?

This study tests experimentally whether teams can create synergies in strategic interactions. For our comparison between team and individual behavior we employ the race game. This game has the advantage that the optimal strategy does neither depend on beliefs about other players nor on distributional or efficiency concerns. Our results reveal that teams do not only outperform individuals but that they can also beat the “truth-wins” benchmark. In particular, varying the length of the race game we find that the team advantage increases with the complexity of the game. The latter finding supports the conjectures made by Charness et al. (2010) and Cooper and Kagel (2005), who suggest a relation between task complexity and the size of synergies created by teams.