Risk Aversion,the Disposition Effect,and Group Decision Making: An Experimental Analysis |
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| Authors: | Wlademir R Prates Newton CA da Costa Jr Anderson Dorow |
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| Institution: | 1. Department of Business Administration, Federal University of Santa Catarina, UFSC – CPGA, Florianopolis, SC, Brazil;2. Department of Economics, Federal University of Santa Catarina, UFSC – CPGA, SC, Brazil |
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| Abstract: | This article reports a laboratory experiment comparing the behavior of individuals and groups in terms of their susceptibility to the disposition effect. A total of 174 students took part in six experimental sessions in which they made decisions individually, in pairs, or in three‐person groups. It was observed that the disposition effect was attenuated when the decisions were made in groups of two or three members. It was also noted that the attenuating effect of group decision making was the result of a reduction in the proportion of gains realized, indicating that the groups were less risk averse than individuals. Copyright © 2017 John Wiley & Sons, Ltd. |
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