A Simple Risk-Sharing Experiment
AbstractThis paper reports on an experiment designed to test whether pairs of individuals are able to exploit efficiency gains in the sharing of a risky financial prospect. Observations from a previous experiment had suggested a general rejection of efficiency in favour of ex post equality. The present experiment explores some possible explanations for this. The results indicate that fairness is not a significant consideration, but rather that having to choose between prospects diverts partners from allocating the chosen prospect efficiently.
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Bibliographic InfoPaper provided by Department of Economics, University of York in its series Discussion Papers with number 00/36.
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Risk-sharing; experiments; bargaining; fairness.;
Other versions of this item:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-04-25 (All new papers)
- NEP-EXP-2004-04-25 (Experimental Economics)
- NEP-FIN-2004-04-25 (Finance)
- NEP-IAS-2000-10-11 (Insurance Economics)
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