Comparing Group and Individual Choices under Risk and Ambiguity: An Experimental Study
AbstractIn this paper, we build on the emerging literature on group decision-making to study the so-called ‘group shift’ effect, i.e., groups are less risk-averse than individuals. Our study complements past research in two ways. First, we study the group shift effect under two sources of uncertainty, namely risk where probabilities are known, and ambiguity where probabilities are imprecise. Second, we study the impact of the group decision rule (unanimity and majority) on group shift. Results from a lottery-choice experiment show a general tendency for the group shift effect, regardless of the decision rule. The group shift effect, however, is found to be significant only under risk in the unanimity treatment. Our study hence provides a clear test of the effect of the decision rule on the group shift effect under both risk and ambiguity.
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Bibliographic InfoPaper provided by International Centre for Behavioural Business Research in its series ICBBR Working Papers with number 15.
Date of creation: 06 May 2011
Date of revision:
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Collective decision; Unanimity; Majority; Preferences; Risk; Ambiguity;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-14 (All new papers)
- NEP-CBE-2011-05-14 (Cognitive & Behavioural Economics)
- NEP-CDM-2011-05-14 (Collective Decision-Making)
- NEP-EXP-2011-05-14 (Experimental Economics)
- NEP-UPT-2011-05-14 (Utility Models & Prospect Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Carmela Di Mauro & Anna Maffioletti, 2004. "Attitudes to risk and attitudes to uncertainty: experimental evidence," Applied Economics, Taylor & Francis Journals, vol. 36(4), pages 357-372.
- M. Vittoria Levati & Stefan Napel & Ivan Soraperra, 2014. "Collective choices under ambiguity," Jena Economic Research Papers 2014-019, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
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