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Alger, Ingela
, Juarez, Laura, Juarez-Torres, Miriam and Miquel-Florensa, Josepa
(2016)
Do informal transfers induce lower efforts? Evidence from lab-in-the-field experiments in rural Mexico.
IAST Working Paper, n. 16-34, Toulouse
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Abstract
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.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | February 2016 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | informal insurance, effort, moral hazard, free-riding effect, empathy effect |
| JEL Classification: | C91 - Laboratory, Individual Behavior D64 - Altruism O12 - Microeconomic Analyses of Economic Development |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 14 Mar 2018 15:14 |
| Last Modified: | 18 Jul 2023 08:44 |
| OAI Identifier: | oai:tse-fr.eu:30163 |
| URI: | https://publications.ut-capitole.fr/id/eprint/23527 |
