IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-00418899.html
   My bibliography  Save this paper

Individual and couple decision behavior under risk: Evidence on the dynamics of power balance

Author

Listed:
  • André de Palma

    (ENS Cachan - École normale supérieure - Cachan, X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris)

  • Nathalie Picard

    (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris, THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique)

  • Anthony Ziegelmeyer

    (Strategic Interaction Group [Jena] - Max Planck Institute of Economics - Max-Planck-Gesellschaft)

Abstract

This paper reports results of an experiment designed to analyze the link between risky decisions made by couples and risky decisions made separately by each spouse. We estimate both the spouses and the couples' degrees of risk aversion, we assess how the risk preferences of the two spouses aggregate when they make risky decisions and we shed light on the dynamics of the decision process that takes place when couples make risky decisions. We find that, far from being fixed, the balance of power within the household is malleable. In most couples, men have, initially, more decision-making power than women but women who ultimately implement the joint decisions gain more and more power over the course of decision making.

Suggested Citation

  • André de Palma & Nathalie Picard & Anthony Ziegelmeyer, 2009. "Individual and couple decision behavior under risk: Evidence on the dynamics of power balance," Working Papers hal-00418899, HAL.
  • Handle: RePEc:hal:wpaper:hal-00418899
    Note: View the original document on HAL open archive server: https://hal.science/hal-00418899
    as

    Download full text from publisher

    File URL: https://hal.science/hal-00418899/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Michael Lechner, 2001. "The Empirical Analysis of East German Fertility after Unification: An Update," European Journal of Population, Springer;European Association for Population Studies, vol. 17(1), pages 61-73, March.
    2. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
    3. Frederic Vermeulen, 2002. "Collective Household Models: Principles and Main Results," Journal of Economic Surveys, Wiley Blackwell, vol. 16(4), pages 533-564, September.
    4. John D. Hey & Chris Orme, 2018. "Investigating Generalizations Of Expected Utility Theory Using Experimental Data," World Scientific Book Chapters, in: Experiments in Economics Decision Making and Markets, chapter 3, pages 63-98, World Scientific Publishing Co. Pte. Ltd..
    5. Donni, Olivier, 2003. "Collective household labor supply: nonparticipation and income taxation," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1179-1198, May.
    6. Starmer, Chris & Sugden, Robert, 1991. "Does the Random-Lottery Incentive System Elicit True Preferences? An Experimental Investigation," American Economic Review, American Economic Association, vol. 81(4), pages 971-978, September.
    7. David Bruner & Michael McKee & Rudy Santore, 2008. "Hand in the Cookie Jar: An Experimental Investigation of Equity-Based Compensation and Managerial Fraud," Southern Economic Journal, John Wiley & Sons, vol. 75(1), pages 261-278, July.
    8. repec:bla:jecsur:v:16:y:2002:i:4:p:533-64 is not listed on IDEAS
    9. Henry Stott, 2006. "Cumulative prospect theory's functional menagerie," Journal of Risk and Uncertainty, Springer, vol. 32(2), pages 101-130, March.
    10. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    11. Michael Lechner, 2005. "The Empirical Analysis of East German Fertility after," Labor and Demography 0505005, University Library of Munich, Germany.
    12. John Hey & Jinkwon Lee, 2005. "Do Subjects Separate (or Are They Sophisticated)?," Experimental Economics, Springer;Economic Science Association, vol. 8(3), pages 233-265, September.
    13. Geoffrey Lancaster & Pushkar Maitra & Ranjan Ray, 2006. "Endogenous Intra‐household Balance of Power and its Impact on Expenditure Patterns: Evidence from India," Economica, London School of Economics and Political Science, vol. 73(291), pages 435-460, August.
    14. Kaushik Basu, 2006. "Gender and Say: a Model of Household Behaviour with Endogenously Determined Balance of Power," Economic Journal, Royal Economic Society, vol. 116(511), pages 558-580, April.
    15. Maurizio Mazzocco, 2007. "Household Intertemporal Behaviour: A Collective Characterization and a Test of Commitment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 857-895.
    16. Ian Bateman & Alistair Munro, 2009. "Household Versus Individual Valuation: What’s the Difference?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(1), pages 119-135, May.
    17. Ian Bateman & Alistair Munro, 2005. "An Experiment on Risky Choice Amongst Households," Economic Journal, Royal Economic Society, vol. 115(502), pages 176-189, March.
    18. Robin Cubitt & Chris Starmer & Robert Sugden, 1998. "On the Validity of the Random Lottery Incentive System," Experimental Economics, Springer;Economic Science Association, vol. 1(2), pages 115-131, September.
    19. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    20. Pahl, Jan, 1995. "His money, her money: Recent research on financial organisation in marriage," Journal of Economic Psychology, Elsevier, vol. 16(3), pages 361-376, September.
    21. Munro, Alistair & Bateman, Ian J. & McNally, Tara, 2008. "The family under the microscope: an experiment testing economic models of household choice," MPRA Paper 8974, University Library of Munich, Germany.
    22. Thomas Baumann & Carsten Schmidt, 2004. "The Jena video laboratory for economic experiments," Papers on Strategic Interaction 2004-06, Max Planck Institute of Economics, Strategic Interaction Group.
    23. David Burner & Michael McKee & Rudy Santore, 2008. "Hand in the Cookie Jar: An Experimental Investigation of Equity‐Based Compensation and Managerial Fraud," Southern Economic Journal, John Wiley & Sons, vol. 75(1), pages 261-278, July.
    24. Eckel, Catherine C. & Wilson, Rick K., 2004. "Is trust a risky decision?," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 447-465, December.
    25. Holt, Charles A, 1986. "Preference Reversals and the Independence Axiom," American Economic Review, American Economic Association, vol. 76(3), pages 508-515, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. André de Palma & Nathalie Picard & Anthony Ziegelmeyer, 2007. "Individual and Couple Decision Behavior under Risk:The Power of Ultimate Control," THEMA Working Papers 2007-03, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    2. Galarza, Francisco, 2009. "Choices under Risk in Rural Peru," MPRA Paper 17708, University Library of Munich, Germany.
    3. Rodriguez-Lara, Ismael & Ponti, Giovanni, 2017. "Social motives vs social influence: An experiment on interdependent time preferences," Games and Economic Behavior, Elsevier, vol. 105(C), pages 177-194.
    4. Jinkwon Lee, 2008. "The effect of the background risk in a simple chance improving decision model," Journal of Risk and Uncertainty, Springer, vol. 36(1), pages 19-41, February.
    5. James Cox & Vjollca Sadiraj & Ulrich Schmidt, 2015. "Paradoxes and mechanisms for choice under risk," Experimental Economics, Springer;Economic Science Association, vol. 18(2), pages 215-250, June.
    6. Fiore, Annamaria, 2009. "Experimental Economics: Some Methodological Notes," MPRA Paper 12498, University Library of Munich, Germany.
    7. David J. Freeman & Guy Mayraz, 2019. "Why choice lists increase risk taking," Experimental Economics, Springer;Economic Science Association, vol. 22(1), pages 131-154, March.
    8. Rodriguez-Lara, Ismael & Ponti, Giovanni, 2017. "Social Motives vs Social Influence: an Experiment on Time Preferences," MPRA Paper 76486, University Library of Munich, Germany.
    9. 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.
    10. Galizzi, Matteo M. & Machado, Sara R. & Miniaci, Raffaele, 2016. "Temporal stability, cross-validity, and external validity of risk preferences measures: experimental evidence from a UK representative sample," LSE Research Online Documents on Economics 67554, London School of Economics and Political Science, LSE Library.
    11. Donni, Olivier & Molina, José Alberto, 2018. "Household Collective Models: Three Decades of Theoretical Contributions and Empirical Evidence," IZA Discussion Papers 11915, Institute of Labor Economics (IZA).
    12. Galliera, Arianna, 2018. "Self-selecting random or cumulative pay? A bargaining experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 72(C), pages 106-120.
    13. Drichoutis, Andreas & Lusk, Jayson, 2012. "Risk preference elicitation without the confounding effect of probability weighting," MPRA Paper 37762, University Library of Munich, Germany.
    14. Guido Baltussen & G. Post & Martijn Assem & Peter Wakker, 2012. "Random incentive systems in a dynamic choice experiment," Experimental Economics, Springer;Economic Science Association, vol. 15(3), pages 418-443, September.
    15. Nathalie Etchart-Vincent & Olivier l’Haridon, 2011. "Monetary incentives in the loss domain and behavior toward risk: An experimental comparison of three reward schemes including real losses," Journal of Risk and Uncertainty, Springer, vol. 42(1), pages 61-83, February.
    16. Philomena M. Bacon & Peter G. Moffatt, 2012. "Mortgage Choice as a Natural Field Experiment on Choice under Risk," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 44(7), pages 1401-1426, October.
    17. Noemí Herranz-Zarzoso & Gerardo Sabater-Grande, 2018. "Framing and repetition effects on risky choices: A behavioral approach," Working Papers 2018/04, Economics Department, Universitat Jaume I, Castellón (Spain).
    18. Yaron Azrieli & Christopher P. Chambers & Paul J. Healy, 2018. "Incentives in Experiments: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 126(4), pages 1472-1503.
    19. Chiappori, Pierre-André & Donni, Olivier, 2009. "Non-unitary Models of Household Behavior: A Survey of the Literature," IZA Discussion Papers 4603, Institute of Labor Economics (IZA).
    20. Katerina Sherstyuk & Nori Tarui & Majah-Leah Ravago & Tatsuyoshi Saijo, 2011. "Payment schemes in random-termination experimental games," Working Papers 201102, University of Hawaii at Manoa, Department of Economics.

    More about this item

    Keywords

    Risk; Balance of power; Experiments; Household decision-making; Risk.;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-00418899. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.