University of East Anglia, The Centre for Social and Economic Research on the Global Environment (CSERGE), Norwich
We present the results of an experiment involving established couples, which uses choices between lotteries to test some economic models of household decision-making. Subjects make choices individually and jointly and are asked to make predictions about their partners choices. Income pooling is not rejected in joint choice but has less explanatory power in individual choice. Many joint choices do not satisfy the Pareto principle. Overall, couples are more risk averse when making choices jointly compared to individual choice. Gender is not a direct determinant of power in joint choices, but female economic dependence significantly reduces womens decisiveness in joint choice.