We analyze a public good game (PGG) with intragroup competition in which, generally but not always, the dominant strategy is to not contribute; therefore, free riding is the unique Nash equilibrium, not achieving Pareto efficiency. We propose a PGG setup where subjects' contributions are rewarded with different individual returns following a rank‐order voluntary contribution mechanism. It is found that the resulting competition for a better return significantly increases contributions. This effect is sensitive to the salience of return differences rewarding higher contributions. Furthermore, the positive effect of return differences on contribution levels depends on an individual's return‐to‐risk sensitivity as elicited through an independent risk elicitation task.

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Recent literature on individual vs. group decision-making, in risky contexts, has brought about divergent results, mainly depending on the institutional rules through which groups take decisions. Some studies where group decisions relied on majority rule showed no appreciable difference between individuals and groups’ preferences, others where unanimity among group members was required found collective decisions to be less risk-averse than individual ones. We elicited groups’ preferences over risk using what we defined “endogenous-decision-rule”, i.e. leaving groups free to endogenously solve the potential disagreement among their members. Our results unambiguously show that individuals are more risk seeker than groups when facing gambles with positive expected payoff difference and more risk-averse in the opposite case.

The recent literature on individual vs. group decisions over risk has brought about divergent results, mainly depending on the institutional rules through which groups take decisions. While some studies where group decisions relied on the majority rule showed no appreciable difference between individuals and groups' preferences, others where unanimity among group members was required found collective decisions to be less risk averse than individual ones. Of course, these studies share the imposition of a choice rule to determine the groups' outcome. Alternatively, in the study at hand, we elicited groups' preferences over risk using a consensus rule, i.e. leaving groups free to endogenously solve the potential disagreement among their members, just as in many real life instances. Our results from a logit regression unambiguously show that individuals' preferences are systematically further from the risk neutrality than those of groups. In particular, individuals are more risk seeker than groups when facing gambles with positive expected payoff difference and more risk averse in the opposite case.