Psychological and social motivations in microfinance contracts: Theory and evidence

• 成果类型: Article
• 署名作者: Dhami, Sanjit; Arshad, Junaid; al-Nowaihi, Ali
• 署名单位: University of Leicester; University of St Andrews
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2022.102912
• 发表日期: 2022
• 关键词: Joint; individual; Public; private repayment; Belief-dependent motivations; Guilt; shame; Lab-in-the-field experiment

摘要

We study, theoretically and empirically, the effort choices of microfinance borrowers under individual liability (IL) and joint liability (JL) contracts when loan repayments are made either privately or publicly. Our theoretical model identifies guilt aversion in a JL contract and shame aversion under public repayment of loans as the main psychological drivers of effort choice. Evidence from our lab-in-the-field experiment in Pakistan reveals large treatment effects and confirms the central roles of guilt and shame. Under private repayment, a JL contract increases effort by almost 100% relative to an IL contract. Under public repayment, effort levels are comparable under IL and JL contracts, indicating that shame aversion plays a more important role than guilt aversion. Under IL, public repayment relative to private repayment increases effort by 60%, confirming our shame-aversion hypothesis. Under JL, the private versus public repayment contrast shows that shame trumps guilt in explaining borrowers' effort choices.