An experiment on risky choice amongst households

A host of experiments have examined theories of risky choice using individuals. However, many important economic decisions are taken within multi-adult households. This paper reports on the first economic experiment designed to test theories of household choice. We use established couples and face them individually and jointly with decisions involving monetary payoffs. We find that joint choices typically are more risk averse than those made by individuals. Meanwhile, choices made by couples exhibit the same kinds of departures from expected utility theory (e.g. the common ratio and common consequence effects) as are regularly recorded with individuals.