UC Davis Agricultural and Resource Economics

Berber Kramer, VU University Amsterdam

The social dilemma of microinsurance: A framed field experiment on free-riding and coordination in microcredit groups

Date and Location

Monday, October 8, 2012, 4:10 PM - 5:30 PM
ARE Conference Room, 2102 Social Sciences and Humanities


This paper analyzes free-riding and coordination problems in microinsurance. We model demand for health insurance in microcredit groups that typically share risk through joint liability as a social dilemma. Less risk averse clients are tempted to free-ride and forgo individual insurance while the more risk averse face a coordination problem. Group insurance binds both types to the social optimum. Microinsurance games played with microcredit clients in Tanzania con rm the free-riding hypothesis and demonstrate limited coordination failures under individual insurance. Group insurance increases demand in the games. These findings provide a potential solution for low uptake of microinsurance.

Subscribe to Upcoming Seminars

Click here to receive weekly notice of all upcoming seminars via email.

Individual seminar and workshop announcements are circulated via separate mailing lists. To subscribe, send an email to the relevant list:

Contact Us

2116 Social Sciences and Humanities
University of California, Davis
One Shields Avenue
Davis, CA 95616

Main Office: 530-752-1515
Student Advising Services: 530-754-9536
DeLoach Conference Room: 530-752-2916
Main Conference Room: 530-754-1850