Individual vs. Group Decision Making:an Experiment on Dynamic Choice under Risk and Ambiguity

Carbone, Enrica and Georgalos, Konstantinos and Infante, Gerardo (2019) Individual vs. Group Decision Making:an Experiment on Dynamic Choice under Risk and Ambiguity. Theory and Decision, 87. 87–122. ISSN 0040-5833

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Abstract

This paper focuses on the comparison of individual and group decision making, in a stochastic inter-temporal problem in two decision environments, namely risk and ambiguity. Using a consumption/saving laboratory experiment, we investigate behaviour in four treatments: (1) individual choice under risk; (2) group choice under risk; (3) individual choice under ambiguity and (4) group choice under ambiguity. Comparing decisions within and between decision environments, we find an anti-symmetric pattern. While individuals are choosing on average closer to the theoretical optimal predictions, compared to groups in the risk treatments, groups tend to deviate less under ambiguity. Within decision environments, individuals deviate more when they choose under ambiguity, while groups are better planners under ambiguity rather than under risk. Our results extend the often observed pattern of individuals (groups) behaving more optimally under risk (ambiguity), to its dynamic dimension.

Item Type: Journal Article
Journal or Publication Title: Theory and Decision
Additional Information: The final publication is available at Springer via https://doi.org/10.1007/s11238-019-09694-8
Uncontrolled Keywords: /dk/atira/pure/subjectarea/asjc/1700/1706
Subjects:
Departments: Lancaster University Management School > Economics
ID Code: 131643
Deposited By: ep_importer_pure
Deposited On: 28 Feb 2019 09:40
Refereed?: Yes
Published?: Published
Last Modified: 25 Feb 2020 04:18
URI: https://eprints.lancs.ac.uk/id/eprint/131643

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