Friday, October 29, 2010

Women, Men, Couples: Decision-making under Risk and the Dynamics of Power Balance

Women buy shoes, men buy cars, so the usual cliché. But who decides on the expenditure for life insurance, pensions or credits? And how will change the decision-making behavior of people when they decide together as a couple, as compared to their individual decisions?

These questions have the Anthony Ziegelmeyer Jena Max Planck Institute of Economics and his colleague André de Palma and Nathalie Picard (University of Cergy-Pontoise, Paris) was investigated in a laboratory experiment. The most important result: The respective influence of partners on joint decisions is by no means stable, but changes in a dynamic process.

Decisions at the household level, the economics has mainly regarded as the decisions of individuals. "A budget is not a fixed entity but a complex process," said Antony Ziegelmeyer the approach of the study. "We are dealing with at least two individuals who are similar but have different goals. We were interested in the process in which they come to a common solution. "

At the landscaped brick Meyer and his colleagues experiment that took part in 22 couples living in a household. All participants were initially given 40 euro start-up capital. Then they stood in twelve game series of eleven times before the decision "lottery" or "payment", that is a risky decision or a less risky option. For the first six-game series, the couples were separated, and men and women decided independently of each other. Then the pair played together for six rounds.

The analysis of the data showed, as expected, that the risk aversion of women is on average higher than that of men. The lowest risk aversion, however, showed couples in joint decisions. This increased the risk of regular women than men.

Above all, women won in the course of a roughly two-hour experiment by little more influence on the collective decisions. "We were surprised, however, that even permanently within individual pairs, the distribution of decision-making changed," says Meyer brick. have the impact that individual household members in the decision making process, so - other than previously thought often was - far from being stable.

"Even this variable play of forces we must find out if we want to gain a realistic understanding of human decision behavior," concludes Anthony Ziegelmeyer a conclusion. Researchers will now extend their results in further studies.

Original publication:
André de Palma, Nathalie Picard, Anthony brick Meyer: "Individual and Couple Decision Behavior under risk: Evidence on the dynamics of power balance"
Journal: Theory and Decision
doi: 10.1007/s11238-009-9179-6

The Max Planck Institute of Economics in Jena deals with a wide range of issues of economic change as a whole, experimental economics and entrepreneurial behavior.

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