Abstract
There is now overwhelming experimental evidence that individuals systematically violate the axioms of Expected Utility theory. In reality, however, many economic decisions are taken by, or on behalf of, groups whose members have a joint stake in those decisions. This paper reports on an experiment in which pairs of individuals are tested for Common-Ratio inconsistencies. We find that the agreed choices of subject-pairs follow a pattern of inconsistency very close to that of individuals' choices. We also look for evidence that group participation increases the consistency of the individuals themselves. With one solitary exception, we find none.
| Original language | English |
|---|---|
| Pages (from-to) | 63-81 |
| Number of pages | 19 |
| Journal | Journal of Risk and Uncertainty |
| Volume | 18 |
| Issue number | 1 |
| Publication status | Published - Apr 1999 |
Keywords
- Expected Utility theory
- Common-Ratio Effect
- experiments
- groups
- CHOICE