Group and individual risk preferences: A lottery-choice experiment with self-employed and salaried workers

Group decision making under risk: An experiment with student couples

“…This has enabled us to study decision-making of long-standing groups with a history of cohabiting for 18 months on average. In line with previous findings (e.g., Masclet et al, 2009), we have found that both individuals and couples are, on average, risk-averse in their choices and that risk preferences are less diverse across groups (i.e., couples) than across individuals. Couples are generally more risk averse than individuals in lotteries with a low probability of winning, but less risk averse when the probability of winning higher payoffs is high.…”

“…Since observing and identifying the influence of group decision-making on risky choices is difficult with field data (see Prather and Middleton, 2002, for an exception using data from mutual fund management), most of this literature has used laboratory experiments to explore group decision-making under risk (e.g., Baker et al, 2008;Shupp and Williams, 2008;Masclet et al, 2009). In these experiments, subjects are randomly assigned to groups and are then requested to make a group decision (either by talking to each other or by voting within a group).…”

“…Typically, groups are found to have a smaller variance in their risk preferences than individuals. Concerning the question of whether groups are more or less risk-averse than individuals, the general evidence seems to suggest that groups are more risk-averse in lotteries with low probabilities of winning the largest payoffs, but less risk-averse when these probabilities are high (e.g., Baker et al, 2008;Shupp and Williams, 2008;Masclet et al, 2009). This pattern is consistent with group choices being closer to what would be expected of rational, risk-neutral decisions in risk experiments.…”

“…By taking this approach, we can check how these couples make risky choices and how their joint decisions relate to their individual decisions. Unfortunately, the previous experimental literature on ad-hoc groups and risky choices has used only three-person groups, nor has it controlled for the gender composition of groups in the analysis of differences between individuals and groups (Baker et al, 2008;Shupp and Williams, 2008;Masclet et al, 2009). …”

The disposition effect in team investment decisions: Experimental evidence

“…Focusing on lottery-choice experiments, a series of studies find that teams are more risk averse than individuals (Baker et al, 2008;Shupp and Williams, 2008;Masclet et al, 2009). 5 Empirical papers analyzing the data of mutual funds report these insights (Bliss et al, 2008;Bär et al, 2011).…”