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Collective choices under ambiguity

Author

Listed:
  • M. Vittoria Levati

    (University of Verona and Max Planck Institute of Economics, Jena)

  • Stefan Napel

    (University of Bayreuth)

  • Ivan Soraperra

    (University of Verona)

Abstract

We investigate experimentally whether collective choice matters for individual attitudes to ambiguity. We consider a two-urn Ellsberg experiment: one urn offers a 45% chance of winning a fixed monetary prize, the other an ambiguous chance. Participants choose either individually or in groups of three. Group decision rules vary. In one treatment the collective choice is taken by majority; in another it is dictated by two group members; in the third it is dictated by a single group member. We observe high proportions of ambiguity averse choices in both individual and collective decision making. Although a majority of participants display consistent ambiguity attitudes across their decisions, collective choice tends to foster ambiguity aversion, especially if the decision rule assigns asymmetric responsibilities to group members. Previous participation in laboratory experiments may miti- gate this.

Suggested Citation

  • M. Vittoria Levati & Stefan Napel & Ivan Soraperra, 2014. "Collective choices under ambiguity," Jena Economic Research Papers 2014-019, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2014-019
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    References listed on IDEAS

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    1. Collective choices under ambiguity
      by Alessandro Cerboni in Knowledge Team on 2014-09-30 16:50:01

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    Cited by:

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    2. Andreas Friedl & Patrick Ring & Ulrich Schmidt, 2017. "Gender differences in ambiguity aversion under different outcome correlation structures," Theory and Decision, Springer, vol. 82(2), pages 211-219, February.
    3. Aggarwal, Divya & Damodaran, Uday, 2020. "Ambiguity attitudes and myopic loss aversion: Experimental evidence using carnival games," Journal of Behavioral and Experimental Finance, Elsevier, vol. 25(C).

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    More about this item

    Keywords

    Ambiguity aversion; majority voting; dictatorship;
    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
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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