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Risk taking and information aggregation in groups

Bougheas, Spiro, Nieboer, Jeroen and Sefton, Martin (2015) Risk taking and information aggregation in groups. Journal of Economic Psychology, 51. pp. 34-47. ISSN 0167-4870

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Identification Number: 10.1016/j.joep.2015.08.001

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.

Item Type: Article
Official URL: http://www.sciencedirect.com/science/journal/01674...
Additional Information: © 2015 The Authors.
Divisions: Social Policy
Subjects: B Philosophy. Psychology. Religion > BF Psychology
H Social Sciences > HB Economic Theory
JEL classification: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior
C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C92 - Laboratory, Group Behavior
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D71 - Social Choice; Clubs; Committees; Associations
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D80 - General
Sets: Departments > Social Policy
Date Deposited: 21 Oct 2015 16:31
Last Modified: 08 Feb 2019 11:48
Projects: ES/H014691/1, ES/H014691/1
Funders: Economic and Social Research Council, Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/64085

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