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Individual and Couple Decision Behavior under Risk: The Power of Ultimate Control

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  • André de Palma
  • Nathalie Picard
  • Anthony Ziegelmeyer

Abstract

This paper reports results of an experiment designed to analyze the link between risky decisions made by couples and risky decisions made separately by each spouse. We estimate both the spouses and the couples’ degrees of risk aversion and we assess how the risk preferences of the two spouses aggregate when they make risky decisions. This enables us to investigate the decision process that takes place when couples make risky decisions. We find that in most couples men have more decision-making power than women and that women’s decision-making power increases when they ultimately implement the joint decisions.

Suggested Citation

  • André de Palma & Nathalie Picard & Anthony Ziegelmeyer, 2008. "Individual and Couple Decision Behavior under Risk: The Power of Ultimate Control," Papers on Strategic Interaction 2006-22, Max Planck Institute of Economics, Strategic Interaction Group.
    • Handle: RePEc:esi:discus:2006-22
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    References listed on IDEAS

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    Cited by:

    1. Carlsson, Fredrik & Martinsson, Peter & Qin, Ping & Sutter, Matthias, 2009. "Household decision making and the influence of spouses’ income, education, and communist party membership: A field experiment in rural China," Working Papers in Economics 356, University of Gothenburg, Department of Economics.
    2. Munro, Alistair & Kebede, Bereket & Tarazona-Gomez, Marcela & Verschoor, Arjan, 2014. "Autonomy and efficiency. An experiment on household decisions in two regions of India," Journal of the Japanese and International Economies, Elsevier, vol. 33(C), pages 114-133.
    3. Schröder, Melanie & Schmitt, Norma & Heynemann, Britta & Brünn, Claudia, 2013. "Income Taxation and Labor Supply: An Experiment on Couple's Work Effort," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79735, Verein für Socialpolitik / German Economic Association.
    4. Edoardo Marcucci & Amanda Stathopoulos & Lucia Rotaris & Romeo Danielis, 2011. "Comparing Single and Joint Preferences: A Choice Experiment on Residential Location in Three-Member Households," Environment and Planning A, , vol. 43(5), pages 1209-1225, May.
    5. Alistair Munro & Bereket Kebede & Marcela Tarazona-Gomez & Arjan Verschoor, 2011. "Autonomy or Efficiency. An experiment on household decisions in two regions of India," GRIPS Discussion Papers 10-33, National Graduate Institute for Policy Studies.
    6. Schröder, Melanie & Schmitt, Norma & Mantei, Britta & Brünn, Claudia, 2014. "Social Norms or Income Taxation - What Drives Couple's Labor Supply? Experimental Evidence," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100375, Verein für Socialpolitik / German Economic Association.
    7. André de Palma & Nathalie Picard & Jean-Luc Prigent, 2009. "Prise en compte de l'attitude face au risque dans le cadre de la directive MiFID," Working Papers hal-00418892, HAL.

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    More about this item

    Keywords

    Household decision-making; Risk; Experiments;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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