HOW GROUPS REACH AGREEMENT IN RISKY CHOICES: AN EXPERIMENT

This paper studies how groups resolve disagreement in lottery choices. In an experiment, subjects submit individual proposals, exchange chat messages, and must reach unanimity. Overall, group choices are more coherent and closer to risk neutrality than individuals'. The proposal of the minority prevails in about one instance out of five. About one third of the groups do not reach immediate agreement after communication. In these groups, extrovert subjects are more likely to lead the group outcome than confused or conscientious subjects. The amount, equality, and timing of chat messages help us to predict which choice prevails in the group. (JEL C92, D81)