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Individual and group preferences over risk: does group size matter?

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  • Morone, Andrea
  • Temerario, Tiziana
  • Nemore, Francesco

Abstract

In this paper we investigated group size impact on risk aversion when a majority rule is applied. Drawing on the widely used Holt and Laury’s (2002) lottery pairs, we observed a risky shift for both individual and groups regardless of their size. However, groups choices are shown to be closer to the risk-neutrality prediction. More interestingly, whereas smaller groups attitudes can be safely approximated by individual choices, larger groups reveal a statistically different risk-loving attitude. This risky shift becomes more prominent as group size increases.

Suggested Citation

  • Morone, Andrea & Temerario, Tiziana & Nemore, Francesco, 2017. "Individual and group preferences over risk: does group size matter?," MPRA Paper 82453, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:82453
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    References listed on IDEAS

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    More about this item

    Keywords

    Preferences; Group; Risk Attitude; Majority Rule; Laboratory.;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D1 - Microeconomics - - Household Behavior

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