Group Decisions Under Ambiguity: Convergence to Neutrality

38 Pages Posted: 16 Apr 2012  

Steffen Keck

University of Vienna

Enrico Diecidue

INSEAD – Decision Sciences

David V. Budescu

Fordham University - Fordham College at Rose Hill

Date Written: April 16, 2012

Abstract

This paper focuses on decisions under ambiguity. Participants in a laboratory experiment made decisions in three different settings: (a) individually, (b) individually after discussing the decisions with others, and (c) in groups of three. We show that groups are more likely to make ambiguity-neutral decisions than individuals, and that individuals make more ambiguity-neutral decisions after discussing the decisions with others. This shift towards higher ambiguity neutrality in groups and after a group discussion is associated with a reduction in the rates of both ambiguity aversion and ambiguity seeking. We attribute the results to the effective and persuasive communication that takes place in groups.

Keywords: ambiguity, group decision making, imprecision, risk, vagueness

JEL Classification: C92, D71, D81

Suggested Citation

Keck, Steffen and Diecidue, Enrico and Budescu, David V., Group Decisions Under Ambiguity: Convergence to Neutrality (April 16, 2012). INSEAD Working Paper No. 2012/43/DS. Available at SSRN: https://ssrn.com/abstract=2040655 or http://dx.doi.org/10.2139/ssrn.2040655

Steffen Keck

University of Vienna ( email )

Oskar Morgenstern Platz
1
Vienna, 1090
Austria

Enrico Diecidue (Contact Author)

INSEAD – Decision Sciences ( email )

France

David V. Budescu

Fordham University - Fordham College at Rose Hill ( email )

United States

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