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Structural Experimentation to Distinguish between Models of Risk Sharing with Frictions

Author

Listed:
  • Laura Schechter

    (UW Madison)

  • Ethan Ligon

    (University of California, Berkeley)

Abstract

We conduct dictator-type games in rural Paraguay; different treatments involve manipulating players' information and choice sets. From individuals' choices in the games, we draw inferences regarding the sorts of impediments to trade restricting villagers' ability to share. We rule out full insurance, hidden investment alone, and limited commitment alone in favor of an environment with both hidden investment and limited commitment.

Suggested Citation

  • Laura Schechter & Ethan Ligon, 2013. "Structural Experimentation to Distinguish between Models of Risk Sharing with Frictions," 2013 Meeting Papers 174, Society for Economic Dynamics.
    • Handle: RePEc:red:sed013:174
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