Common knowledge promotes risk pooling in an experimental economic game.

ABSTRACT: Risk management is a problem humans have faced throughout history and across societies. One way to manage risk is to transfer it to other parties through formal and informal insurance systems. One informal method of self-insurance is limited risk pooling, where individuals can ask for help only when in need. Models suggest that need-based transfer systems may require coordination and common knowledge to be effective. To explore the impact of common knowledge on social coordination and risk pooling in volatile environments, we designed and ran a Risk Pooling Game. We compared participants who played the game with no advance priming or framing to participants who read one of two texts describing real-world systems of risk pooling. Players in the primed games engaged in more repetitive asking

SUBMITTER: Cronk L 

PROVIDER: S-EPMC6695222 | biostudies-literature | 2019

REPOSITORIES: biostudies-literature