Risk Pooling, Risk Preferences, and Social Networks
AbstractUsing data from an experiment conducted in 70 Colombian communities, we investigate who pools risk with whom when trust is crucial to enforce risk pooling arrangements. We explore the roles played by risk attitudes and social networks. Both theoretically and empirically, we nd that close friends and relatives group assortatively on risk attitudes and are more likely to join the same risk pooling group, while unfamiliar participants group less and rarely assort. These ndings indicate that where there are advantages to grouping assortatively on risk attitudes those advantages may be inaccessible when trust is absent or low.
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Bibliographic InfoPaper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~11-11-05.
Date of creation: 05 Jan 2011
Date of revision:
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Postal: Georgetown University Department of Economics Washington, DC 20057-1036
Web page: http://econ.georgetown.edu/
Postal: Marcia Suss Administrative Officer Georgetown University Department of Economics Washington, DC 20057-1036
Other versions of this item:
- Orazio Attanasio & Abigail Barr & Juan Camilo Cardenas & Garance Genicot & Costas Meghir, 2012. "Risk Pooling, Risk Preferences, and Social Networks," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 134-67, April.
- Orazio Attansio & Abigail Barr & Juan Camilo Cardenas & Garance Genicot & Costas Mehgir, 2009. "Risk Pooling, Risk preferences, and Social Networks," CSAE Working Paper Series 2009-20, Centre for the Study of African Economies, University of Oxford.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-28 (All new papers)
- NEP-EVO-2012-03-28 (Evolutionary Economics)
- NEP-EXP-2012-03-28 (Experimental Economics)
- NEP-IAS-2012-03-28 (Insurance Economics)
- NEP-NET-2012-03-28 (Network Economics)
- NEP-SOC-2012-03-28 (Social Norms & Social Capital)
- NEP-UPT-2012-03-28 (Utility Models & Prospect Theory)
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