Centralized-Sanctioning and Legitimate Authority in Public Goods Provision: Evidence from a 'Lab-in-The-Field' Experiment in Uganda
In: Western Political Science Association 2011 Annual Meeting Paper
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In: Western Political Science Association 2011 Annual Meeting Paper
SSRN
Working paper
In: The journal of development studies, Band 58, Heft 1, S. 96-114
ISSN: 1743-9140
World Affairs Online
In: The journal of development studies, Band 58, Heft 1, S. 96-114
ISSN: 1743-9140
In: Evaluation review: a journal of applied social research, Band 47, Heft 3, S. 479-503
ISSN: 1552-3926
Even though there has been increasing interest in the role of cognition in leadership and in identifying the personality traits of effective leaders, there is a paucity of studies that investigate the unique influence of managers' trait affectivity and cognitive ability on their different risk and time preferences. This paper investigates the role of managers' trait affectivity and cognitive ability in their loss aversion and present bias among 623 top managers at textile and garment firms in Vietnam. We combine data on preferences elicited through a lab-in-the-field experiment with survey data. We find that managers with high positive affectivity (PA) or cognitive ability are less subject to loss aversion and present bias. In contrast, a manager with high negative affectivity (NA) is more likely to be impatient and loss averse. Furthermore, heterogeneity of trait affectivity and cognitive ability determines different loss aversion and present bias levels of managers in SMEs vis-à-vis their counterparts in large firms. Remarkably, we observe striking evidence that trait affectivity and cognitive ability significantly affect loss aversion and present bias levels of managers who were born during the Vietnam War. Still, it is not the story of their counterparts born after the Vietnam War. The results of our study are expected to provide valuable information regarding the role played by trait affectivity and cognitive ability in determining managers' loss aversion and present bias in different pathways.
In: Economic Development and Cultural Change, Band 70, Heft 2, S. 653-670
ISSN: 1539-2988
To cope with losses from extreme hydro-meteorological events, governments typically implement disaster relief programs and offer debt relief to affected parties. Governments in developing countries have made extensive use of total and partial debt coverage as a way to encourage investment in key sectors and in agriculture in particular. In the context of climate change, such practices are not viable because risk is systemic and losses can easily surpass most governments' debt relief budgets. Insurance is an obvious alternative, but insurance uptake in developing countries is typically low, and little is known about the interaction between investment, insurance, and debt relief programs, which effectively reduce borrowers' liability. This paper examines the effect of farmers' liability on demand for credit with and without insurance. We test predictions of a theoretical model in a lab in the field experiment with coffee farmers in Costa Rica. Farmers choose how much to invest in six different settings, described on the one hand by whether the loan is insured or not, and on the other by the probability that the government provides full debt relief. As expected, uptake of loans with insurance is significantly higher than without insurance when farmers are fully liable, and insurance is not relevant for investments if debt relief is guaranteed. Interestingly, uncertainty about liability is enough to trigger the uptake of insured debt. Our results suggest that well-defined rules for disaster relief are needed to support development of insurance markets.
BASE
To cope with losses from extreme hydro-meteorological events, governments typically implement disaster relief programs and offer debt relief to affected parties. Governments in developing countries have made extensive use of total and partial debt coverage as a way to encourage investment in key sectors and in agriculture in particular. In the context of climate change, such practices are not viable because risk is systemic and losses can easily surpass most governments' debt relief budgets. Insurance is an obvious alternative, but insurance uptake in developing countries is typically low, and little is known about the interaction between investment, insurance, and debt relief programs, which effectively reduce borrowers' liability. This paper examines the effect of farmers' liability on demand for credit with and without insurance. We test predictions of a theoretical model in a lab in the field experiment with coffee farmers in Costa Rica. Farmers choose how much to invest in six different settings, described on the one hand by whether the loan is insured or not, and on the other by the probability that the government provides full debt relief. As expected, uptake of loans with insurance is significantly higher than without insurance when farmers are fully liable, and insurance is not relevant for investments if debt relief is guaranteed. Interestingly, uncertainty about liability is enough to trigger the uptake of insured debt. Our results suggest that well-defined rules for disaster relief are needed to support development of insurance markets.
BASE
In: Forthcoming in REFC – Spanish Journal of Finance and Accounting
SSRN
In: APSA 2010 Annual Meeting Paper
SSRN
Working paper
In: Economics letters, Band 239, S. 111754
ISSN: 0165-1765
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SSRN
Working paper
In: Journal of development economics, Band 138, S. 99-115
ISSN: 0304-3878
In: IZA Discussion Paper No. 10110
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Working paper
In: World development: the multi-disciplinary international journal devoted to the study and promotion of world development, Band 147, S. 105623