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Risk taking and information aggregation in groups

Bougheas, Spiros; Nieboer, Jeroen; Sefton, Martin

Authors

Jeroen Nieboer j.nieboer@lse.ac.uk



Abstract

We report a controlled laboratory experiment examining risk-taking and information aggregation in groups facing a common risk. The experiment allows us to examine how subjects respond to new information, in the form of both privately observed signals and signals reported from others. We find that a considerable number of subjects exhibit ‘reverse confirmation bias’: they place less weight on information from others that agrees with their private signal and more weight on conflicting information. We also find a striking degree of consensus when subjects make decisions on behalf of the group under a random dictatorship procedure. Reverse confirmation bias and the incidence of consensus are considerably reduced when group members can share signals but not communicate.

Journal Article Type Article
Publication Date Aug 8, 2015
Journal Journal of Economic Psychology
Print ISSN 0167-4870
Electronic ISSN 0167-4870
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 51
APA6 Citation Bougheas, S., Nieboer, J., & Sefton, M. (2015). Risk taking and information aggregation in groups. Journal of Economic Psychology, 51, https://doi.org/10.1016/j.joep.2015.08.001
DOI https://doi.org/10.1016/j.joep.2015.08.001
Keywords Group Behavior, Teams, Decision Making, Risk, Experiment
Publisher URL http://www.sciencedirect.com/science/article/pii/S0167487015000999
Copyright Statement Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by/4.0

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by/4.0


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Copyright Statement
Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by/4.0





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