Risk preference differentials of small groups and individuals
This research compares lottery valuation decisions made by individuals with similar decisions made by small groups. There is an extensive social psychology literature addressing group versus individual decision making but few studies explore this issue in economic contexts with cash rewards. Willingness-to-pay data elicited from independent samples of individuals and three-person groups in a repeated-measures experimental design reveal that: the variance of risk preferences is generally smaller for groups than individuals and the average group is "more" risk averse than the average individual in high-risk situations, but groups tend to be "less" risk averse in low-risk situations. Copyright 2008 The Author(s). Journal compilation Royal Economic Society 2008.
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Volume (Year): 118 (2008)
Issue (Month): 525 (01)
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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.:
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- Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
- Tversky, Amos & Kahneman, Daniel, 1992. " Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
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