Morone, Andrea and Morone, Piergiuseppe (2012): Are small groups expected utility?
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In this paper we analyse the empirical performance of several preference functionals using individual and group data. Our investigation aims to address two fundamental questions that have, until now, not been addressed in literature. Specifically, we intend to assess if there exists a risky choice theory that statistically fits group decisions significantly better than alternative theories, and if there are significant differences between individual and group choices. Experimental findings reported in this paper provide answers to both questions showing that when risky choices are undertaken by small groups (dyads in our case), disappointment aversion outperforms several alternative preference functionals, including expected utility. Since expected utility typically emerged as the dominant model in individual risky choices, this finding suggests that differences between individual and group choices exist, showing that the preference aggregation process drives out EU.
|Item Type:||MPRA Paper|
|Original Title:||Are small groups expected utility?|
|Keywords:||group decision; expected utility; risk and uncertainty|
|Subjects:||D - Microeconomics > D7 - Analysis of Collective Decision-Making > D70 - General
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty
C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C92 - Laboratory, Group Behavior
C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior
|Depositing User:||Andrea Morone|
|Date Deposited:||19. Apr 2012 12:48|
|Last Modified:||16. Feb 2013 00:33|
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