TY - JOUR

T1 - Individual vs. Group Decision Making

T2 - an Experiment on Dynamic Choice under Risk and Ambiguity

AU - Carbone, Enrica

AU - Georgalos, Konstantinos

AU - Infante, Gerardo

N1 - The final publication is available at Springer via https://doi.org/10.1007/s11238-019-09694-8

PY - 2019/7/1

Y1 - 2019/7/1

N2 - This paper focuses on the comparison of 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 decisionenvironments, individuals deviate more when they choose under ambiguity, while groups are better planners under ambiguity rather than under risk. Our results extend the often observed pattern of individuals (groups) behaving more optimally under risk (ambiguity), to its dynamic dimension.

AB - This paper focuses on the comparison of 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 decisionenvironments, individuals deviate more when they choose under ambiguity, while groups are better planners under ambiguity rather than under risk. Our results extend the often observed pattern of individuals (groups) behaving more optimally under risk (ambiguity), to its dynamic dimension.

KW - risk

KW - ambiguity

KW - Inter-temporal Optimisation

KW - Group Decision Making

KW - learning

KW - experiment

U2 - 10.1007/s11238-019-09694-8

DO - 10.1007/s11238-019-09694-8

M3 - Journal article

VL - 87

SP - 87

EP - 122

JO - Theory and Decision

JF - Theory and Decision

SN - 0040-5833

ER -