Risk Attitudes and Well-Being in Latin America

A common premise in both the theoretical and policy literatures on development is that people remain poor because they are too impatient to save and too risk averse to take the sort of chances needed to accumulate wealth. The empirical literature, however, suggests that this assumption is far from proven. We report on field experiments designed to address many of the issues confounding previous analyses of the links between risk preferences and well-being. Our sample includes more than 3,000 participants who were drawn representatively from six Latin American cities: Bogotá, Buenos Aires, Caracas, Lima, Montevideo, San José. In addition to the experiment which reveals interesting cross-country differences, participants completed an extensive survey that provides data on a variety of well-being indicators and a number of important controls. Focusing on risk preferences, we find little evidence of robust links between risk aversion and well-being. However, when we analyze the results of three treatments designed to better reflect common choices made under uncertainty, we see that these, more subtle, instruments correlate better with well-being, even after controlling for a variety of other important factors like the accumulation of human capital and access to credit.risk aversion, ambiguity aversion, loss aversion, risk pooling, well-being, Latin America

Experiments and Economic Development: Lessons from Field Labs in the Developing World

Along with the traditional primitives of economic development (material preferences, technology, and endowments), there is a growing interest in exploring how psychological and sociological factores (e.g., bounded rationality, norms, or social preferences) also influence economic decisions, the evolution of institutions, and outcomes. Simultaneously, a vast literature has arisen arguing that economic experiments are important tools in identifying and quantifying the role of institutions, socialnorms and preferences on behavior and outcomes. Reflecting on our experience conducting experiments in the field over more than five years, we survey the growing literature at the intersection of these two research areas. Our review has four components. In the introduction we set the stage identifying a set of behavioral factors that seem to be central for understanding growth and economic development./ We then divide the existing literature in two piles: standard experiments conducted in the field and on how to econometrically identify sociological factors in experimental data. We conclude by suggesting topics for future research.experimental economics, behavioral economics, institutions, social preferences, poverty, development

COOPERATION IN LARGE NETWORKS: AN EXPERIMENTAL

We present a new design of a simple public goods experiment with a large number of players, where up to 80 people in a computer lab have the possibility to connect with others in the room to induce more cooperators to contribute to the public good and overcome the social dilemma. This experimental design explores the possibility of social networks to be used and institutional devices to create the same behavioral responses we observe with small groups (e.g. commitments, social norms, reciprocity, trust, shame, guilt) that seem to induce cooperativebehavior in the private provision of public goods. The results of our experiment suggest that the structure of the network affects not only the players´ ability to communicate, but their willingness to do so as well. Finally, we find that the local connectivity structure of the network has an important role as determinant of the willingness of the players to engage in a more costly type of collective action, namely the endogenous creation of new links to individuals previously out of reach.Social capital, social networks, collective action, cooperation, VCM,experiments, public goods provision

X-Ray Observations of Black Widow Pulsars

We describe the first X-ray observations of five short orbital period ($P_B < 1$ day), $\gamma$-ray emitting, binary millisecond pulsars. Four of these, PSRs J0023+0923, J1124$-$3653, J1810+1744, and J2256$-$1024 are `black-widow' pulsars, with degenerate companions of mass $\ll0.1 M_{\odot}$, three of which exhibit radio eclipses. The fifth source, PSR J2215+5135, is an eclipsing `redback' with a near Roche-lobe filling $\sim$0.2 solar mass non-degenerate companion. Data were taken using the \textit{Chandra X-Ray Observatory} and covered a full binary orbit for each pulsar. Two pulsars, PSRs J2215+5135 and J2256$-$1024, show significant orbital variability while PSR J1124$-$3653 shows marginal orbital variability. The lightcurves for these three pulsars have X-ray flux minima coinciding with the phases of the radio eclipses. This phenomenon is consistent with an intrabinary shock emission interpretation for the X-rays. The other two pulsars, PSRs J0023+0923 and J1810+1744, are fainter and do not demonstrate variability at a level we can detect in these data. All five spectra are fit with three separate models: a power-law model, a blackbody model, and a combined model with both power-law and blackbody components. The preferred spectral fits yield power-law indices that range from 1.3 to 3.2 and blackbody temperatures in the hundreds of eV. The spectrum for PSR J2215+5135 shows a significant hard X-ray component, with a large number of counts above 2 keV, which is additional evidence for the presence of intrabinary shock emission and is similar to what has been detected in the low-mass X-ray binary to millisecond pulsar transition object PSR J1023+0038.Comment: 8 pages, 6 figures, 2 tables, submitted to Ap