Risk taking and information aggregation in groups

Spiros Bougheas, Jeroen Nieboer and Martin Sefton

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We report a controlled laboratory experiment examining risk-taking and information aggregation in groups facing a common risk. The experiment allows us to examine how subjects respond to new information, in the form of both privately observed signals and signals reported from others. We find that a considerable number of subjects exhibit ‘reverse confirmation bias’: they place less weight on information from others that agrees with their private signal and more weight on conflicting information. We also find a striking degree of consensus when subjects make decisions on behalf of the group under a random dictatorship procedure. Reverse confirmation bias and the incidence of consensus are considerably reduced when group members can share signals but not communicate.

Keywords: Group behaviour; teams; decision making; risk; experiment (search for similar items in EconPapers)
JEL-codes: C91 C92 D71 D80 (search for similar items in EconPapers)
Date: 2015-08-08
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp, nep-ict and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in Journal of Economic Psychology, 8, August, 2015, 51, pp. 34-47. ISSN: 0167-4870

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Related works:
Journal Article: Risk taking and information aggregation in groups (2015)
Working Paper: Risk Taking and Information Aggregation in Groups (2015)
Working Paper: Risk Taking and Information Aggregation in Groups (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:64085

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