Fighting AIDS in Africa: A Principal-Agent Analysis

16 Pages Posted: 26 Jul 2015

Date Written: July 23, 2015

Abstract

The use of a lottery by the World Bank Development Research Group to incentivize safer sexual behavior as a part of an AIDS prevention strategy in Lesotho provides an example of a novel yet real-world application of a textbook principal-agent model where the agent is risk-preferring instead of the more usual risk averse. Consideration of the model leads to the conclusion that research to understand the incentives to which risk-preferring agents respond is long overdue.

Keywords: AIDS, principal-agent, loss aversion, risk-preferring agent, lottery

JEL Classification: D81, D82, I18

Suggested Citation

Pierre, Norbert, Fighting AIDS in Africa: A Principal-Agent Analysis (July 23, 2015). Available at SSRN: https://ssrn.com/abstract=2635814 or http://dx.doi.org/10.2139/ssrn.2635814

Norbert Pierre (Contact Author)

Independent ( email )

United States
917-854-3730 (Phone)

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