An Experiment on Risky Choice Amongst Households

14 Pages Posted: 8 Mar 2005  

Ian J. Bateman

University of East Anglia (UEA) - School of Economic and Social Studies

Alistair Munro

School of Economics - University of East Anglia

Abstract

A host of experiments have examined theories of risky choice using individuals. However, many important economic decisions are taken within multi-adult households. This paper reports on the first economic experiment designed to test theories of household choice. We use established couples and face them individually and jointly with decisions involving monetary payoffs. We find that joint choices typically are more risk averse than those made by individuals. Meanwhile, choices made by couples exhibit the same kinds of departures from expected utility theory (e.g. the common ratio and common consequence effects) as are regularly recorded with individuals.

Suggested Citation

Bateman, Ian J. and Munro, Alistair, An Experiment on Risky Choice Amongst Households. Economic Journal, Vol. 115, No. 502, pp. C176-C189, March 2005. Available at SSRN: https://ssrn.com/abstract=678430

Ian Julian Bateman (Contact Author)

University of East Anglia (UEA) - School of Economic and Social Studies ( email )

Norwich, Norfolk NR4 7TJ
United Kingdom

Alistair Munro

School of Economics - University of East Anglia ( email )

School of Economics
University of East Anglia
Norwich, NR4 7TJ
United Kingdom
+44 (0) 1603 593404 (Phone)

HOME PAGE: http://www.uea.ac.uk/~j048

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