publication . Article . 2006

Choice Shifts in Groups: A Decision-Theoretic Basis

Kfir Eliaz; Debraj Ray; Ronny Razin;
Restricted
  • Published: 01 Sep 2006 Journal: The American Economic Review, volume 96, pages 1,321-1,332 (issn: 0002-8282, Copyright policy)
  • Publisher: American Economic Association
Abstract
The phenomenon of choice shifts in group decision-making has received attention in the social psychology literature. Faced with a risky group decision, individuals appear to support more extreme choices relative to those they would make on their own. This paper demonstrates that from a decision-theoretic perspective, choice shifts are intimately connected to failures of expected utility theory. In the model studied here, the Allais paradox is equivalent to a well-studied configuration of choice shifts. Thus, our results marry two well-known behavioral regularities, one in individual decision theory and another in the social psychology of groups. (JEL D71, D81)
Subjects
free text keywords: Economics and Econometrics, Welfare economics, Von Neumann–Morgenstern utility theorem, Microeconomics, Evidential decision theory, Positive economics, Allais paradox, Decision theory, Economics, Decision field theory, Subjective expected utility, Group decision-making, Causal decision theory
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publication . Article . 2006

Choice Shifts in Groups: A Decision-Theoretic Basis

Kfir Eliaz; Debraj Ray; Ronny Razin;