Identifying Group Polarization in Risky Decisions

In the study of social psychology, group dynamics plays a fundamental role in understanding how individuals interact within groups. Various theories and principles explain phenomena such as groupthink, social loafing, and the influence of group cohesion on decision-making. One particularly interesting phenomenon is the 'risky shift effect,' where groups tend to make decisions that are riskier than the average of the individual members' decisions.

Consider a situation where a group of colleagues is tasked with deciding on a significant investment for their company. While individually, some team members might be cautious, the group collectively decides on a riskier strategy, reflecting the risky shift effect.

Which theory best explains the tendency of groups to adopt riskier decisions compared to individual judgments?