Group Structure And Group Decision

In our world, no matter what kind of bargaining mechanism, many decisions aregenerated in the framework of a group, such as companies’ investment, policy-makingunder the multi-party system. And for the former, we can check the ownership structureand corporate performance. Unfortunately, the existing literature and data survey do notgive us a certain explanation about the relationship between ownership structure andcorporate performance. But after checking the literature from experimental economics,what I find out is the ownership structure will affect the assessment about investment risk,further affecting corporate performance. The other example is about the policy-makingunder the multi-party system. Because political parties can be considered as sub-groups,then these sub-groups make up a large group, and the middle voter model stresses thatthe policy will be close to the preferences of middle voter. However, the structure of acountry’s political parties still is not discussed.Because of the identity label of individuals, they are often divided into separategroups positively or passively, such as interest groups, political parties and religious.When an individual joins in a group, the behavior of him often makes a big differencewith the behavior of the group. In this paper, I check the literature and find that the groupstructure is ignored in the research of group behavior, so firstly, I design an experiment tocheck role of the structure of group in the decision-making of the group, then adding thisidea to the empirical analysis: the party groups in the United States, trying to analyze thestructure of political parties in the United States on U.S. policy and defense spending, Iuse those two cases as an example to check the results from experiment because thepolicy plays an important role in the economic development and therefore we shouldmake sure that the good policy can be made successfully. I choose the defense spendingas another case based on risky behavior. As defense spending often leads to militarycompetition among the countries, while the increase in defense spending will reducegovernment’s spending in other aspect, and this will affect the welfare of people.Specifically, this paper includes the following aspects:Firstly I check the literature, and find out that the group structure is ignored by thethe existing literature, then I will give an experiment based on the Rubinstein bargainingmechanism, I will show the results from analysis of experimental data, stressing that thegroup structure will affect the decision-making of the group, combining with the summary of government behavior literature, I analyze the structure of political parties onthe impact of U.S. policy and U.S. defense spending.