Are risks over multiple attributes traded off? A case study of aid

Lata Gangadharan (), Glenn Harrison and Anke Leroux

Journal of Economic Behavior & Organization, 2019, vol. 164, issue C, 166-198

Abstract: Understanding decisions in situations involving multiple risks is vital in many contexts, including the provision of aid to developing countries. Aid typically involves trade-offs over multiple, desirable, but risky outcomes. We partner with an aid organisation and design a laboratory experiment to investigate multi-attribute risk preferences in the context of donations to risky aid projects. We find significant differences between attitudes over single risk outcomes in monetary and non-monetary domains. Our results show that individuals are generally multi-attribute risk averse and view aid outcomes as substitutes rather than complements. These preferences of donors contrast sharply with the views of experts and aid agencies, who tend to emphasise the complementary nature of aid outcomes. Finally, when individuals make risky donation decisions with their own money rather than someone else's money, the degree of risk aversion decreases markedly.

Keywords: Multi-attribute risk preferences; Non-monetary risks; Correlation aversion; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D91 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268119301775
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:164:y:2019:i:c:p:166-198

DOI: 10.1016/j.jebo.2019.05.025

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().