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Are small groups Expected Utility?

Andrea Morone and Piergiuseppe Morone ()
Authors registered in the RePEc Author Service: Till Requate (), Eva Camacho Cuena () and Israel Waichman ()

No 2012/08, Working Papers from Economics Department, Universitat Jaume I, Castellón (Spain)

Abstract: In this paper we analyse the empirical performance of several preference functionals using individual and group data. Our investigation aims to address two fundamental questions that have, until now, not been addressed in literature. Specifically, we intend to assess if there exists a risky choice theory that statistically fits group decisions significantly better than alternative theories, and if there are significant differences between individual and group choices. Experimental findings reported in this paper provide answers to both questions showing that when risky choices are undertaken by small groups (dyads in our case), disappointment aversion outperforms several alternative preference functionals, including expected utility. Since expected utility typically emerged as the dominant model in individual risky choices, this finding suggests that differences between individual and group choices exist, showing that the preference aggregation process drives out EU.

Keywords: group decision; expected utility; risk and uncertainty. (search for similar items in EconPapers)
JEL-codes: C91 C92 D70 D81 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2012
New Economics Papers: this item is included in nep-dcm, nep-evo, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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