Journal
JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION
Volume 63, Issue 3, Pages 412-422Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.jebo.2005.04.023
Keywords
decision under risk; group decision; expected utility; portfolio selection
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One reason why decision makers are often teams and not individuals may be that team decisions comply more closely with economic rationality. We compare individual and team decisions, when systematic deviations from the expected utility theory (EUT) and the portfolio selection theory (PST) are to be expected. We find almost no evidence for the greater compliance of team decisions with the principles of EUT. However, there is substantial evidence for the consistency of learn decisions with the PST. Compared to individuals, teams accumulate significantly more expected value at a significantly lower total risk (measured in standard deviation, S.D.). (C) 2006 Elsevier B.V. All rights reserved.
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