When She Lives Longer: An Experimental Study of Saving Decisions by Couples

Max Planck Institute for Research into Economic Systems, Papers on Strategic Interaction Working Paper No. 02-2002

19 Pages Posted: 13 Sep 2002

See all articles by Vital Anderhub

Vital Anderhub

Humboldt University of Berlin - Faculty of Economics

Dennis Alexis Valin Dittrich

Touro College Berlin; Bremen International Graduate School of Social Sciences (BIGSSS)

Werner Guth

Max Planck Institute of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Nadege Marchand

Groupe d' Analyse et de Theorie Economique (GATE)

Date Written: August 2002

Abstract

We investigate the intertemporal allocation behavior of spouses with different deterministic life expectations in an experiment. In each period of their life both partners propose a consumption level of which one is then randomly implemented. Thus both partners must anticipate their partner's and their own future choices when deciding how much to consume today. To allow for learning one experiences many "lives". In spite of the complex dynamics optimal behavior is rather simple and straightforward in the sense of conditional consumption smoothing. Participants achieve a rather high degree of efficiency that does not change over time. A substantial number of participants does not care whether their partner receives any payoff. This extremely selfish behavior is punished by their respective partners.

Keywords: intra-household behavior, experimental economics, other regarding attitudes, reputation formation

JEL Classification: C73, C91, D91

Suggested Citation

Anderhub, Vital and Dittrich, Dennis Alexis Valin and Güth, Werner and Marchand, Nadege, When She Lives Longer: An Experimental Study of Saving Decisions by Couples (August 2002). Max Planck Institute for Research into Economic Systems, Papers on Strategic Interaction Working Paper No. 02-2002. Available at SSRN: https://ssrn.com/abstract=312130 or http://dx.doi.org/10.2139/ssrn.312130

Vital Anderhub

Humboldt University of Berlin - Faculty of Economics ( email )

Spandauer Strasse 1
D-10178 Berlin
Germany

Dennis Alexis Valin Dittrich (Contact Author)

Touro College Berlin ( email )

Am Rupenhorn 5
Berlin, 14055
Germany

Bremen International Graduate School of Social Sciences (BIGSSS) ( email )

Wiener Strasse
FVG-West
Bremen, DE 28215
Germany

Werner Güth

Max Planck Institute of Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Nadege Marchand

Groupe d' Analyse et de Theorie Economique (GATE) ( email )

CNRS UMR 5824
93, chemin des Mouilles - B.P.167
69130 Ecully cedex
France

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