Choice Shifts in Groups: A Decision-Theoretic Basis
American Economic Review
vol. 96,
no. 4, September 2006
(pp. 1321-1332)
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)Citation
Eliaz, Kfir, Debraj Ray, and Ronny Razin. 2006. "Choice Shifts in Groups: A Decision-Theoretic Basis." American Economic Review, 96 (4): 1321-1332. DOI: 10.1257/aer.96.4.1321JEL Classification
- D81 Criteria for Decision-Making under Risk and Uncertainty