How do households allocate risk? / Christoph Engel/Alexandra Fedorets/Olga Gorelkina
VerfasserEngel, Christoph ; Fedorets, Alexandra ; Gorelkina, Olga
ErschienenBonn : Max Planck Institute for Research on Collective Goods, November 2018
Elektronische Ressource
Umfang1 Online-Ressource (29 Seiten) : Diagramme
SerieDiscussion papers of the Max Planck Institute for Research on Collective Goods ; 2018/14
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
How do households allocate risk? [1.03 mb]
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Individuals often have to decide to which degree of risk they want to expose others, or how much risk to accept if their choice has an externality on third parties. One typical application is a household. We run an experiment in the German Socio-Economic Panel with two members from 494 households. Participants have a good estimate of each other's risk preferences, even if not explicitly informed. They do not simply match this preference when deciding on behalf of the other household member, but shy away from exposing others to risk. We model the situation, and we find four distinct types of individuals, and two distinct types of households.