Risk Taking and Information Aggregation in Groups

Spiros Bougheas, Jeroen Nieboer and Martin Sefton

No 2015-07, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

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 behavior; Teams; Decision Making; Risk; Experiment (search for similar items in EconPapers)
Date: 2015-07
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp and nep-net
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Citations: View citations in EconPapers (2)

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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:not:notcdx:2015-07

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