HomePublications

Investment Behaviour, Risk Sharing and Social Distance

Research output: Contribution to journalArticle

Open Access permissions

Open

Documents

  • risk pooling

    Accepted author manuscript, 490 KB, PDF document

    Embargo ends: 31/12/99

DOI

Authors

Organisational units

Abstract

Using a lab-in-the-field experiment in Uganda we study how risk sharing influences investment behaviour. Depending on the treatment, an investor may decide to share profits with a paired person, and/or the paired person may compensate the investor for investment losses. Following sharing norms in African societies, predicted investment is higher if loss sharing is possible, and/or profit sharing is not possible. Contrary to these predictions, we find that investment is higher when losses may not be shared or when profits may be shared with friends. A combination of directed altruism and expected reciprocity appears most plausible to explain these results.

Details

Original languageEnglish
Pages (from-to)777–802
Number of pages26
JournalThe Economic Journal
Volume125
Issue number584
DOIs
Publication statusPublished - May 2015
Peer-reviewedYes

View graph of relations

ID: 42405828

Related by journal
  1. Fool Me Once: An Experiment on Credibility and Leadership

    Research output: Contribution to journalArticle

  2. Information Processing Constraints and Asset Mispricing

    Research output: Contribution to journalArticle

  3. Contributions to Competition Economics: Introduction

    Research output: Contribution to journalArticle