Decision-Making under Risk: From Individual Preferences to Couple Decisions

40 Pages Posted: 14 Jun 2019 Last revised: 15 Jun 2019

See all articles by Andre de Palma

Andre de Palma

University of Cergy-Pontoise - Department of Economics

Julien Monardo

University of Bristol

Nathalie Picard

affiliation not provided to SSRN

Anthony Ziegelmeyer

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics; Queen's University Belfast - Queen's Management School

Date Written: October 17, 2018

Abstract

There is a growing literature that studies intrahousehold decisions, although few papers study risk taking behavior. Yet, risk is unavoidable in many couple decisions, including residential location, labour supply, children or financial investments. In this paper, we consider couples facing financial risky decisions. Such decisions have implications for the couple and are thus likely to be made collectively by the spouses. Moreover, spouses may have altruistic preferences. Using a sample of 110 couples in former East Germany, we decompose the process leading from individual preferences to couple decision under risk, taking into account both spouses bargaining powers and altruism.

Suggested Citation

De Palma, Andre and Monardo, Julien and Picard, Nathalie and Ziegelmeyer, Anthony, Decision-Making under Risk: From Individual Preferences to Couple Decisions (October 17, 2018). Available at SSRN: https://ssrn.com/abstract=3389788 or http://dx.doi.org/10.2139/ssrn.3389788

Andre De Palma

University of Cergy-Pontoise - Department of Economics ( email )

Site des Chênes 1
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Cergy-Pontoise, Cédex F-95011
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33 1 34 25 62 33 (Fax)

Julien Monardo (Contact Author)

University of Bristol ( email )

36 Tyndall's Park Road
Bristol, Avon BS8 1TB
United Kingdom

Nathalie Picard

affiliation not provided to SSRN

Anthony Ziegelmeyer

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

Queen's University Belfast - Queen's Management School ( email )

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

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