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Estimating individual and group preference functionals using experimental data

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  • A. Morone
  • P. Morone

Abstract

In this paper, the empirical performance of several preference functionals is assessed using individual and group experimental data. We investigate if there is a risky choice theory that fits group decisions better than alternative theories, and if there are significant differences between individual and group choices. Experimental findings reported in this paper provide answers to both of those questions showing that expected utility gains a “winning” position over higher-level functionals (we considered disappoint aversion and two variants of rank-dependent utility) when risky choices are undertaken by individuals as well as by small groups. However, in the group experiment, alternatives (and, most notably, disappoint aversion) improve their relative performance, a fact that hints at the existence of differences between individual and group choices. We interpreted this result as evidence that feelings-like disappointment aversion become stronger in group decision. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • A. Morone & P. Morone, 2014. "Estimating individual and group preference functionals using experimental data," Theory and Decision, Springer, vol. 77(3), pages 403-422, October.
    • Handle: RePEc:kap:theord:v:77:y:2014:i:3:p:403-422
    DOI: 10.1007/s11238-014-9431-6
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    Cited by:

    1. Andrea Morone & Simone Nuzzo & Rocco Caferra, 2019. "The Dollar Auction Game: A Laboratory Comparison Between Individuals and Groups," Group Decision and Negotiation, Springer, vol. 28(1), pages 79-98, February.
    2. Morone, Andrea & Temerario, Tiziana, 2015. "Eliciting Preferences Over Risk: An Experiment," MPRA Paper 68519, University Library of Munich, Germany.
    3. Zonna, Davide, 2016. "Sprechi di cibo e tentativi di riduzione. Un caso sperimentale [Avoiding food waste. A field experiment]," MPRA Paper 76097, University Library of Munich, Germany.
    4. Waichman, Israel & Blanckenburg, Korbinian von, 2020. "Is there no “I” in “Team”? Interindividual-intergroup discontinuity effect in a Cournot competition experiment," Journal of Economic Psychology, Elsevier, vol. 77(C).
    5. Temerario, Tiziana, 2014. "Individual and Group Behaviour Toward Risk: A Short Survey," MPRA Paper 58079, University Library of Munich, Germany.

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    More about this item

    Keywords

    Group decision; Expected utility; Risk and uncertainty; C91; C92; D81; D70;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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