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Glenn W Harrison, Steven J Humphrey, Arjan Verschoor

Cited by*: 1 Downloads*: 24

We review experimental evidence collected from risky choice experiments using poor subjects in Ethiopia, India and Uganda. Using these data we estimate that just over 50% of our sample behaves in accordance with expected utility theory and that the rest subjectively weight probability according to prospect theory. Our results show that inferences about risk aversion are robust to whichever model we adopt when we estimate each model separately. However, when we allow both models to explain portions of the data simultaneously, we infer risk aversion for subjects behaving according to expected utility theory and risk seeking behavior for subjects behaving according to prospect theory. We conclude that the current practice of designing policies under the assumption that one or other explains all behavior is fundamentally flawed.

Vegard Iversen, Cecile Jackson, Bereket Kebede, Alistair Munro, Arjan Verschoor

Cited by*: 7 Downloads*: 23

We test core theories of the household using variants of a public good game and experimental data from 240 couples in rural Uganda. Spouses do not maximise surplus from cooperation and realise a greater surplus when women are in charge. This violates assumptions of unitary and cooperative models. When women control the common account, they receive less than when men control it; this contradicts standard bargaining models. Women contribute less than men and are rewarded more generously by men than vice versa. This casts doubt on postulates in Sen (1990). While the absence of altruism is rejected, we find evidence for opportunism. The results are put in a socioeconomic context using quantitative and qualitative survey data. Assortative matching and correlates of bargaining power influence behaviour within the experiments. Our findings suggest that a one-size fits all?? model of the household is unlikely to be satisfactory.