Group risk-taking in a two-choice situation: Replication, extension, and a model

Abstract

In an attempt to determine if individual risk preferences change under group conditions, individuals and groups were observed when making binary decisions. The expected values of the outcomes were held constant while the probabilities of the two events varied across conditions. As previously, it was found that when the probabilities of the two events are .6 and .4, a conservative shift is obtained. When these probabilities are .8 and .2, however, there was a tendency for groups to shift toward risk. A two-stage parameter-free model was suggested to account for individual and group choices.