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Individual vs. couple behavior: an experimental investigation of risk preferences

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  • Mohammed Abdellaoui
  • Olivier l’Haridon
  • Corina Paraschiv

Abstract

In this article, we elicit both individuals’ and couples’ preferences assuming prospect theory (PT) as a general theoretical framework for decision under risk. Our experimental method, based on certainty equivalents, allows to infer measurements of utility and probability weighting at the individual level and at the couple level. Our main results are twofold. First, risk attitude for couples is compatible with PT and incorporates deviations from expected utility similar to those found in individual decision making. Second, couples’ attitudes towards risk are found to be consistent with a mix of individual attitudes, women being more influent on couples’ preferences at low probability levels. Copyright Springer Science+Business Media New York 2013

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  • Mohammed Abdellaoui & Olivier l’Haridon & Corina Paraschiv, 2013. "Individual vs. couple behavior: an experimental investigation of risk preferences," Theory and Decision, Springer, vol. 75(2), pages 175-191, August.
    • Handle: RePEc:kap:theord:v:75:y:2013:i:2:p:175-191
    DOI: 10.1007/s11238-012-9322-7
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    1. Natalia Montinari & Michela Rancan, 2018. "Risk taking on behalf of others: The role of social distance," Journal of Risk and Uncertainty, Springer, vol. 57(1), pages 81-109, August.
    2. Bernedo Del Carpio, María & Alpizar, Francisco & Ferraro, Paul J., 2022. "Time and risk preferences of individuals, married couples and unrelated pairs," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 97(C).
    3. Boto-García, David & Mariel, Petr & Baños-Pino, José Francisco, 2023. "Intra-household bargaining for a joint vacation," Journal of choice modelling, Elsevier, vol. 47(C).
    4. Philomena Bacon & Anna Conte & Peter Moffatt, 2014. "Assortative mating on risk attitude," Theory and Decision, Springer, vol. 77(3), pages 389-401, October.
    5. Zheng, Jiakun & Couprie, Helene & Hopfensitz, Astrid, 2022. "Collective risk taking by couples: individual vs household risk," MPRA Paper 116537, University Library of Munich, Germany.
    6. Mohammed Abdellaoui & Olivier l'Haridon & Corina Paraschiv, 2013. "Do Couples Discount Future Consequences Less than Individuals?," Economics Working Paper Archive (University of Rennes & University of Caen) 201320, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    7. Alistair Munro, 2018. "Intra†Household Experiments: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 134-175, February.
    8. Arthur E. Attema & Han Bleichrodt & Olivier l’Haridon & Stefan A. Lipman, 2020. "A comparison of individual and collective decision making for standard gamble and time trade-off," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(3), pages 465-473, April.
    9. Rong, Rong & Gnagey, Matthew & Grijalva, Therese, 2018. "“The less you Discount, the more it shows you really care”: Interpersonal discounting in households," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 1-23.
    10. Glenn W. Harrison & J. Todd Swarthout, 2016. "Cumulative Prospect Theory in the Laboratory: A Reconsideration," Experimental Economics Center Working Paper Series 2016-04, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.

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