•   •

Risk Sharing Relations and Enforcement Mechanisms Abigail Barr, University of Oxford Marleen Dekker, African Studies Centre Leiden Marcel Fafchamps, University of Oxford Download the Paper (PDF format) - April 28, 2008 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing. ABSTRACT: We investigate whether the set of available enforcement mechanisms affects the formation of risk sharing relations by applying dyadic regression analysis to data from a specifically designed behavioural experiment, two surveys and a genealogical mapping exercise. During the experiment participants are invited to form risk sharing relations under three institutional environments, each associated with different enforcement mechanisms: external, intrinsic, and endogenous extrinsic, i.e., the threat of (partial) social exclusion. Dyads who are similar in age and gender, genetically related, or who belong to the same organizations with an economic purpose are more likely to share risk. However, the latter are associated with less risk sharing when endogenous extrinsic incentives can be applied, while co-membership in religious congregations and being related by marriage support enforcement through such incentives. We find no evidence of assortative grouping on risk preferences but, ex post, co-group members' risk-taking behavior converges. SUGGESTED CITATION: Abigail Barr, Marleen Dekker, and Marcel Fafchamps, "Risk Sharing Relations and Enforcement Mechanisms" (April 28, 2008). The Centre for the Study of African Economies Working Paper Series. Working Paper 294. http://www.bepress.com/csae/paper294