Risk Preference Differentials of Small Groups and Individuals

Robert Shupp and Arlington Williams

No 2006-006, CAEPR Working Papers from Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington

Abstract: This research compares lottery valuation decisions made by individuals with similar decisions made by small groups. There is an extensive social psychology literature addressing group versus individual decision making, but few studies explore this issue in economic contexts with cash rewards. Willingness-topay data elicited from independent samples of individuals and three-person groups in a repeated-measures experimental design reveal that: 1) the variance of risk preferences is generally smaller for groups than individuals, and 2) the average group is more risk averse than the average individual in high-risk situations, but groups tend to be less risk averse in low-risk situations.

Keywords: lab experiments; risk preferences; group decisions; certainty equivalents (search for similar items in EconPapers)
JEL-codes: C91 C92 D80 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2006-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Risk preference differentials of small groups and individuals (2008)
Journal Article: Risk preference differentials of small groups and individuals (2008)
Working Paper: Risk Preference Differentials of Small Groups and Individuals (2006)
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