Risk Aversion, the Disposition Effect, and Group Decision Making: An Experimental Analysis

This article reports a laboratory experiment comparing the behavior of individuals and groups in terms of their susceptibility to the disposition effect. A total of 174 students took part in six experimental sessions in which they made decisions individually, in pairs, or in three-person groups. It...

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Bibliographic Details
Published in:Managerial and decision economics 2017-10, Vol.38 (7), p.1033-1045
Main Authors: Prates, Wlademir R., da Costa, Newton C.A., Dorow, Anderson
Format: Article
Language:English
Subjects:
Decision making
Decision support systems
Group decision making
Risk
Risk aversion
Susceptibility
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Summary:This article reports a laboratory experiment comparing the behavior of individuals and groups in terms of their susceptibility to the disposition effect. A total of 174 students took part in six experimental sessions in which they made decisions individually, in pairs, or in three-person groups. It was observed that the disposition effect was attenuated when the decisions were made in groups of two or three members. It was also noted that the attenuating effect of group decision making was the result of a reduction in the proportion of gains realized, indicating that the groups were less risk averse than individuals.
ISSN:0143-6570
1099-1468
DOI:10.1002/mde.2843