An Experiment on Risky Choice Amongst Households

Ian Bateman and Alistair Munro

Economic Journal, 2005, vol. 115, issue 502, C176-C189

Abstract: A host of experiments have examined theories of risky choice using "individuals". However, many important economic decisions are taken within multi-adult "households". This paper reports on the first economic experiment designed to test theories of household choice. We use established couples and face them individually and jointly with decisions involving monetary payoffs. We find that joint choices typically are more risk averse than those made by individuals. Meanwhile, choices made by couples exhibit the same kinds of departures from expected utility theory (e.g. the common ratio and common consequence effects) as are regularly recorded with individuals. Copyright 2005 Royal Economic Society.

Date: 2005
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