Risk taking and information aggregation in groups

Spiros Bougheas, Jeroen Nieboer and Martin Sefton

Journal of Economic Psychology, 2015, vol. 51, issue C, 34-47

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)
JEL-codes: C91 C92 D71 D80 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: 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:eee:joepsy:v:51:y:2015:i:c:p:34-47

DOI: 10.1016/j.joep.2015.08.001

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