We conduct a field experiment with low-income subjects in Dallas, Texas. We examine voluntary, informal risk sharing using a visual representation of the solidarity game developed for low-literacy populations. We find substantially more 'fixed gift to loser' behavior and less 'egotistical' behavior than in previous studies. Individuals who display 'egotistical' behavior are more risk tolerant. The amount of the conditional gifts is positively related to age, income, and connection to the community. However, trust and empathy, which are commonly discussed as drivers for solidarity, are not significantly related to the amount given.
Bibliographical noteFunding Information:
The authors completed the work for this manuscript while at the University of Texas at Dallas in addition to their present affiliations. A number of people assisted at various stages of this research. We would especially like to thank Natalia Candelo Londoño, Elizabeth Pickett, Lance Mattingly, Tammy Leonard, and other researchers associated with the Neighborhood Change Research Initiative at the UT Dallas. Axel Ockenfels, Lata Gangadharan, Alexander Smith, and Christine Binzel provided helpful comments on previous versions of this manuscript. Funding provided by the National Science Foundation , HSD award # 0827350.
- Field experiment
- Informal risk sharing
- Social preferences