Individual and Group Preferences Over Risk: An Experiment

Morone, Andrea and Temerario, Tiziana (2016): Individual and Group Preferences Over Risk: An Experiment.

Abstract

The recent literature on individual and group choices over risk has led to different results. In some studies under unanimity, groups were found to be less risk averse than individuals, while those under majority did not highlight significant differences. However, both the types of studies impose the decision rule to the group. In the present work we elicited groups’ preference under risk using a consensus rule, i.e. groups are free to solve disagreement endogenously, just as in the real life. Results from our pairwise choices experiment shows that when group members are free to use any rule they want in order to reach unanimity, there is no statistical difference between individuals’ and groups’ risk aversion.

• Item Type: MPRA Paper
• Language: English
• Keywords: Risk; uncertainty; decision-making; group decision; lottery; experimental economics; experiment
• Subjects: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C92 - Laboratory, Group Behavior; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty

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