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Risk Aversion, Overconfidence and Private Information as Determinants of Majority Thresholds
Author(s) -
Attanasi Giuseppe,
Corazzini Luca,
Georgantzís Nikolaos,
Passarelli Francesco
Publication year - 2014
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/1468-0106.12070
Subject(s) - overconfidence effect , economics , risk aversion (psychology) , voting , private information retrieval , econometrics , test (biology) , function (biology) , psychology , social psychology , financial economics , statistics , mathematics , expected utility hypothesis , political science , law , paleontology , evolutionary biology , politics , biology
We present and experimentally test a theoretical model of majority threshold determination as a function of voters’ risk preferences. The experimental results confirm the theoretical prediction of a positive correlation between the voter's risk aversion and the corresponding preferred majority threshold. Furthermore, the experimental results show that a voter's preferred majority threshold negatively relates to the voter's confidence about how others will vote. Moreover, in a treatment in which individuals receive a private signal about others’ voting behaviour, the confidence‐related motivation of behaviour loses ground to the signal's strength.