Individual and group decision making under risk: An experimental study of Bayesian updating and violations of first-order stochastic dominance |
| |
| Authors: | Gary Charness Edi Karni Dan Levin |
| |
| Institution: | (1) Department of Economics, University of California, Santa Barbara, CA 93106, USA;(2) Department of Economics, Johns Hopkins University, Baltimore, MD 21218, USA;(3) Department of Economics, The Ohio State University, Columbus, OH 43210, USA |
| |
| Abstract: | This paper reports the results of experiments designed to test whether individuals and groups abide by monotonicity with respect
to first-order stochastic dominance and Bayesian updating when making decisions under risk. The results indicate a significant
number of violations of both principles. The violation rate when groups make decisions is substantially lower, and decreasing
with group size, suggesting that social interaction improves the decision-making process. Greater transparency of the decision
task reduces the violation rate, suggesting that these violations are due to judgment errors rather than the preference structure.
In one treatment, however, less complex decisions result in a higher error rates.
|
| |
| Keywords: | Decision making under risk Group decisions Bayesian updating First-order stochastic dominance |
| 本文献已被 SpringerLink 等数据库收录！ |
|
