Abstract
This paper reports on an experiment designed to test whether pairs of individuals are able to exploit ex ante efficiency gains in the sharing of a risky financial prospect. Observations from a previous experiment had suggested a general rejection of efficiency in favour of ex post equality. The present experiment explores some possible explanations for this. The results indicate that fairness is not a significant consideration, but rather that having to choose between prospects diverts partners from allocating the chosen prospect efficiently.
| Original language | English |
|---|---|
| Pages (from-to) | 23-38 |
| Number of pages | 16 |
| Journal | Journal of Risk and Uncertainty |
| Volume | 28 |
| Issue number | 1 |
| Publication status | Published - Jan 2004 |
Keywords
- risk-sharing
- experiment
- bargaining
- fairness