Template-Type: ReDIF-Paper 1.0
Author-Name: Enrica Carbone
Author-Name-First: Enrica
Author-Name-Last: Carbone
Author-Name: Konstantinos Georgalos
Author-Name-First: Konstantinos
Author-Name-Last: Georgalos
Author-Name: Gerardo Infante
Author-Name-First: Gerardo
Author-Name-Last: Infante
Title: Individual vs. Group Decision Making: an Experiment on Dynamic Choice under Risk and Ambiguity
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<br/>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.
Creation-Date: 2016
File-URL: http://www.lancaster.ac.uk/media/lancaster-university/content-assets/documents/lums/economics/working-papers/LancasterWP2016_018.pdf
File-Format: application/pdf
Number: 138739716
Classification-JEL: C91, C92, D11, D91, E21
Keywords: Risk, Ambiguity, Inter-temporal Optimisation, Group Decision Making, Learning, Experiment
Handle: RePEc:lan:wpaper:138739716