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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 in lottery choices. In an experiment, subjects submit individual proposals, exchange chat messages, and must reach unanimity. Overall, group choices are more coherent and closer to risk neutrality than individuals’. The proposal of the minority prevails in about one instance out of five. About one third of the groups do not reach immediate agreement after communication. In these groups, extrovert subjects are more likely to lead the group outcome than confused or conscientious subjects. The amount, equality and timing of chat messages help us to predict which choice prevails in the group.

Suggested Citation

  • Jingjing Zhang & Marco Casari, 2010. "How groups reach agreement in risky choices: an experiment," IEW - Working Papers 506, Institute for Empirical Research in Economics - University of Zurich.
  • Handle: RePEc:zur:iewwpx:506
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Haoran He & Marie Claire Villeval, 2014. "Are teams less inequality averse than individuals?," Post-Print halshs-01077253, HAL.
    2. Antonio Filippin & Paolo Crosetto, 2016. "A Reconsideration of Gender Differences in Risk Attitudes," Management Science, INFORMS, vol. 62(11), pages 3138-3160, November.
    3. Stephan Jagau & Theo (T.J.S.) Offerman, 2017. "Defaults, Normative Anchors and the Occurrence of Risky and Cautious Shifts," Tinbergen Institute Discussion Papers 17-083/I, Tinbergen Institute.
    4. repec:eee:jeborg:v:145:y:2018:i:c:p:294-305 is not listed on IDEAS
    5. Marco Casari & Jingjing Zhang & Christine Jackson, 2016. "Same process, different outcomes: group performance in an acquiring a company experiment," Experimental Economics, Springer;Economic Science Association, vol. 19(4), pages 764-791, December.
    6. Morone, Andrea & Temerario, Tiziana, 2015. "Eliciting Preferences Over Risk: An Experiment," MPRA Paper 68519, University Library of Munich, Germany.
    7. repec:spr:jeicoo:v:12:y:2017:i:3:d:10.1007_s11403-016-0172-1 is not listed on IDEAS
    8. Bougheas, Spiros & Nieboer, Jeroen & Sefton, Martin, 2015. "Risk taking and information aggregation in groups," Journal of Economic Psychology, Elsevier, vol. 51(C), pages 34-47.
    9. Andrea Morone & Francesco Nemore & Tiziana Temerario, 2017. "Individual and group preferences over risk: Does group size matter?," EERI Research Paper Series EERI RP 2017/12, Economics and Econometrics Research Institute (EERI), Brussels.
    10. 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.
    11. Yoshio Kamijo & Teruyuki Tamura, 2016. "Altruistic and risk preference of individuals and groups," Working Papers SDES-2016-12, Kochi University of Technology, School of Economics and Management, revised Oct 2016.
    12. Carbone, Enrica & Infante, Gerardo, 2015. "Are groups better planners than individuals? An experimental analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 112-119.
    13. Stefanescu, Razvan & Dumitriu, Ramona, 2015. "Alegerea soluţiilor pentru expunerile faţă de risc
      [Choosing solutions to risk exposures]
      ," MPRA Paper 65074, University Library of Munich, Germany.
    14. He, Haoran & Villeval, Marie Claire, 2017. "Are group members less inequality averse than individual decision makers?," Journal of Economic Behavior & Organization, Elsevier, vol. 138(C), pages 111-124.
    15. 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.
    16. Jingjing Zhang, 2012. "Communication in asymmetric group competition over public goods," ECON - Working Papers 069, Department of Economics - University of Zurich.
    17. Ambrus, Attila & Greiner, Ben & Pathak, Parag A., 2015. "How individual preferences are aggregated in groups: An experimental study," Journal of Public Economics, Elsevier, vol. 129(C), pages 1-13.
    18. Haoran He & Marie Claire Villeval, 2014. "Are team members less inequality averse than individual decision makers?," Working Papers halshs-00996545, HAL.
    19. Fredrik Carlsson & Peter Martinsson & Ping Qin & Matthias Sutter, 2013. "The influence of spouses on household decision making under risk: an experiment in rural China," Experimental Economics, Springer;Economic Science Association, vol. 16(3), pages 383-401, September.
    20. Marco Casari & Christine Jackson & Jingjing Zhang, 2009. "Do Groups Fall Prey to the Winner's Curse?," Department of Economics Working Papers 2009-18, McMaster University.
    21. Casari, Marco & Zhang, Jingjing & Jackson, Christine, 2015. "Same Process, Different Outcomes: Group Performance in an Acquiring a Company Experiment," IZA Discussion Papers 9614, Institute for the Study of Labor (IZA).
    22. 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.
    23. Enrica Carbone & Konstantinos Georgalos & Gerardo Infante, 2016. "Individual vs. Group Decision Making: an Experiment on Dynamic Choice under Risk and Ambiguity," Working Papers 138739716, Lancaster University Management School, Economics Department.
    24. Temerario, Tiziana, 2014. "Individual and Group Behaviour Toward Risk: A Short Survey," MPRA Paper 58079, University Library of Munich, Germany.
    25. A. Morone & P. Morone, 2014. "Estimating individual and group preference functionals using experimental data," Theory and Decision, Springer, vol. 77(3), pages 403-422, October.

    More about this item

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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