Experimental economic methods are used to explore individual decision-making in poor communities with limited access to the formal credit and insurance markets. I explore preferences for sharing in the United States and rural Kenya using experimental dictator games which measure altruism and inequality-aversion in non-strategic environments. In a sample of U.S. undergraduates, I find that the context of a dictator game impacts the level of selfishness and altruism observed, but not the willingness to sacrifice efficiency to enhance equity. In a related study, I measure the willingness to reward individual effort, relative to underlying preferences for sharing unearned income, among rural Kenyans and U.S. undergraduates. The results suggest that Kenyan subjects are more generous on the whole, but that they do not reward others for their labor; U.S. subjects, on the other hand, share more with those who have exerted effort than with those who have received lottery winnings---just as they are more generous with their own unearned income than with wages they received for exerting effort. In the final study, I report the results of a framed field experiment testing the impact of microfinance contract structure on moral hazard in project choice. I find that joint liability contracts encourage free-riding and risky investment decisions, but that the costs to the lender are more than compensated for by forcing borrowers to insure each other.project choice by j reduces ia#39;s expected earnings in the current period. Second, because risky investments by borrower j reduce ia#39;s expected profits, the utility of future borrowing, Di, depends on the choice that onea#39;s partner will make in theanbsp;...
|Title||:||Essays in Experimental Development Economics|
|Publisher||:||ProQuest - 2008|