Individual vs. Group Decision Making: an Experiment on Dynamic Choice under Risk and Ambiguity

Enrica Carbone (), Konstantinos Georgalos and Gerardo Infante

No 138739716, Working Papers from Lancaster University Management School, Economics Department

Abstract: This paper focuses on comparing individual and group decision making, in a stochastic inter-temporal problem in two decision environments, namely risk and ambiguity. Using a consumption/saving laboratory experiment, we investigate behaviour in four treatments: (1) individual choice under risk; (2) group choice under risk; (3) individual choice under ambiguity and (4) group choice under ambiguity. Comparing decisions within and between decision environments, we find an anti-symmetric pattern. While individuals are choosing on average closer to the theoretical optimal predictions, compared to groups in the risk treatments, groups tend to deviate less under ambiguity. Within decision environments, individuals deviate more when they choose under ambiguity, while groups are better planners under ambiguity rather than under risk. We argue that the results might be driven by differences in the levels of ambiguity and risk attitudes between individuals and groups, extending the frequently observed pattern of groups behaving closer to risk and ambiguity neutrality, to its dynamic dimension.

Keywords: Risk; Ambiguity; Inter-temporal Optimisation; Group Decision Making; Learning; Experiment (search for similar items in EconPapers)
JEL-codes: C91 C92 D11 D91 E21 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp, nep-mac and nep-upt
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Related works:
Journal Article: Individual vs. group decision-making: an experiment on dynamic choice under risk and ambiguity (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:lan:wpaper:138739716

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