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How groups reach agreement in risky choices: an experiment

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  • Jingjing Zhang
  • Marco Casari

Abstract

This paper studies how groups resolve disagreement when they must reach unanimity after submitting individual proposals and exchanging text-form messages via a chat window in lottery choice experiments. We find that the majority proposal does not always prevail. The minority proposal prevails sometimes, especially when it is closer to risk neutrality. About one third of the groups disagrees after communication and would have got zero payoffs if disagreement remains after two more attempts without communication. In these groups, extrovert subjects are more likely to lead the group outcome than confused or conscientious subjects. Overall group choices are more coherent and closer to risk neutrality than individualsÕ. Checking the recorded messages, we find that the chat activity is intense, growing with the level of disagreement and aims at finding consensus. The amount and timing of chat messages help us to predict which choice prevails in the group.

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Bibliographic Info

Paper provided by McMaster University in its series Department of Economics Working Papers with number 2009-08.

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Length: 29 pages
Date of creation: Sep 2009
Date of revision:
Handle: RePEc:mcm:deptwp:2009-08

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Keywords: Risk Attitude; Group Decision Making; Communication; Experiments;

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References

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  5. Cason, Timothy N & Mui, Vai-Lam, 1997. "A Laboratory Study of Group Polarisation in the Team Dictator Game," Economic Journal, Royal Economic Society, vol. 107(444), pages 1465-83, September.
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  7. Bettina Kuon & Abdolkarim Sadrieh & Barbara Mathauschek, 1999. "Teams Take the Better Risks," Discussion Paper Serie B 452, University of Bonn, Germany.
  8. Hackett Steven & Schlager Edella & Walker James, 1994. "The Role of Communication in Resolving Commons Dilemmas: Experimental Evidence with Heterogeneous Appropriators," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 99-126, September.
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  10. Laughlin, Patrick R. & Bonner, Bryan L. & Miner, Andrew G., 2002. "Groups perform better than the best individuals on Letters-to-Numbers problems," Organizational Behavior and Human Decision Processes, Elsevier, vol. 88(2), pages 605-620, July.
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  14. Robert S. Shupp & Arlington Williams, 2003. "Risk Preference Differentials of Small Groups and Individuals," Working Papers 200301, Ball State University, Department of Economics, revised Apr 2006.
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Cited by:
  1. Jingjing Zhang, 2012. "Communication in asymmetric group competition over public goods," ECON - Working Papers 069, Department of Economics - University of Zurich.
  2. Haoran He & Marie Claire Villeval, 2014. "Are teams less inequality averse than individuals ?," Working Papers 1417, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
  3. Spiros Bougheas & Jeroen Nieboerr & Martin Sefton, . "Risk Taking and Information Aggregation in Groups," Discussion Papers 2014-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  4. Sheremeta, Roman & Zhang, Jingjing, 2009. "Can Groups Solve the Problem of Over-Bidding in Contests?," MPRA Paper 49885, University Library of Munich, Germany.
  5. Keck, Steffen & Diecidue, Enrico & Budescu, David V., 2014. "Group decisions under ambiguity: Convergence to neutrality," Journal of Economic Behavior & Organization, Elsevier, vol. 103(C), pages 60-71.
  6. Daniela Di Cagno & Emanuela Sciubba & Marco Spallone, 2012. "Choosing a gambling partner: testing a model of mutual insurance in the lab," Theory and Decision, Springer, vol. 72(4), pages 537-571, April.
  7. Kugler, Tamar & Kausel, E.E. & Kocher, Martin G., 2012. "Are groups more rational than individuals? A review of interactive decision making in groups," Munich Reprints in Economics 18215, University of Munich, Department of Economics.
  8. Antonio FILIPPIN & Paolo CROSETTO, 2014. "A Reconsideration of Gender Differences in Risk Attitudes," Departmental Working Papers 2014-01, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  9. Bliss, Richard T. & Potter, Mark E. & Schwarz, Christopher, 2012. "Decision making and risk aversion in the Cash Cab," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 163-173.

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