publication . Preprint . 2004

Choice Shifts in Groups

Kfir Eliaz; Debraj Ray;
Open Access
  • Published: 11 Aug 2004
Abstract
The phenomenon of "choice shifts" in group decision-making is fairly ubiquitous in the social psychology literature. Faced with a choice between a ``safe" and ``risky" decision, group members appear to move to one extreme or the other, relative to the choices each member might have made on her own. Both risky and cautious shifts have been identified in different situations. This paper demonstrates that from an individual decision-making perspective, choice shifts may be viewed as a systematic violation of expected utility theory. We propose a model in which a well-known failure of expected utility - captured by the Allais paradox - is equivalent to a particular ...
Subjects
free text keywords: Choice Shifts, Disappointment Aversion, Allais Paradox, jel:D72, jel:D81
Funded by
NSF| Group Polarization
Project
  • Funder: National Science Foundation (NSF)
  • Project Code: 0421852
  • Funding stream: Directorate for Social, Behavioral & Economic Sciences | Division of Social and Economic Sciences
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