A Simple Risk-Sharing Experiment

John Bone (), John Hey and John Suckling

Journal of Risk and Uncertainty, 2004, vol. 28, issue 1, 23-38

Abstract: This paper reports on an experiment designed to test whether pairs of individuals are able to exploit ex ante 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. Copyright Kluwer Academic Publishers 2004

Keywords: risk-sharing; experiment; bargaining; fairness (search for similar items in EconPapers)
Date: 2004
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DOI: 10.1023/B:RISK.0000009434.18807.bd

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