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Group and individual risk preferences: a lottery-choice experiment with self-employed and salaried workers

David Masclet, Nathalie Colombier, Laurent Denant-Boèmont and Youenn Loheac ()
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Nathalie Colombier: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper focuses on decision making under risk, comparing group and individual risk preferences in a lottery-choice experiment inspired by Holt and Laury (2002). The experiment presents subjects with a menu of unordered lottery choices which allows us to measure risk aversion. In the individual treatment, subjects make lottery choices individually; in the group treatment, each subject was placed in an anonymous group of three, where unanimous lottery choice decisions were made via voting. Finally, in a third treatment, called the choice treatment, subjects could choose whether to be on their own or in a group. The originality of this research lies in the fact that we introduced variability in socio-demographic characteristics by recruiting not only students but also salaried workers and self-employed workers. Our main findings indicate the importance of contextual variables in decisions under risk: groups are more likely than individuals to choose safe lotteries for decisions with low winning percentages. Moreover, groups converge toward less risky decisions because subjects who were relatively less risk averse were more likely to change their vote in order to conform to the group average decision. Finally, apart from the context, our results show that individuals risk attitude seems to be strongly correlated with both the type and the sector (private or public) of employment.

Keywords: Decision under risk; Individual decision; Group decision; Self-employment (search for similar items in EconPapers)
Date: 2009
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Published in Journal of Economic Behavior and Organization, Elsevier, 2009, 70, pp.470-484. 〈10.1016/j.jebo.2007.11.002〉

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DOI: 10.1016/j.jebo.2007.11.002

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