RT Journal Article
SR 00
ID 10.1086/702858
A1 Alger, Ingela
A1 Juarez, Laura
A1 Juarez-Torres, Miriam
A1 Miquel-Florensa, Josepa
T1 Do informal transfers induce lower efforts? Evidence from lab-in-the-field experiments in rural Mexico
JF Economic Development and Cultural Change
YR 2020
FD 2020-10
VO vol. 69
IS n° 1
SP 107
OP 171
K1 informal insurance
K1 effort
K1 moral hazard
K1 free-riding effect
K1 empathy effect
AB How does informal risk sharing affect incentives to avoid risk? While moral hazard is expected under formal insurance, theory suggests that the incentive effects of informal risk sharing are ambiguous: internalization of the external effects of transfers on others may reduce or enhance incentives to avoid risk. To study this issue, which is particularly relevant for developing economies, we designed a novel real-effort lab experiment and conducted it in 16 small villages in rural Mexico. We find that subjects internalize the effects of transfers enough for the presence of transfers to significantly increase effort compared to autarky situations.
PB University of Chicago Press
SN 0013-0079
LK https://publications.ut-capitole.fr/id/eprint/26252/
UL http://tse-fr.eu/pub/32938