The participant receives an endowment and decides to allocate their money between two pots. Contributions to the private pot will not be observed by the spouse. Contributions to the household pot will be multiplied by 2x and divided between the participant and their spouse. Contributions to the household pot will be revealed to both spouses. A participant that maximizes household income should allocate all experimental endowment to the household pot.
The participant is told that they will be able to purchase some vouchers in the lab. They can either purchase these goods with allocation from the private pot, in which case, their consumption will not be seen by the spouse. They can also purchase any of these goods together with their spouse after their investment proceeds from the household pot is distributed.
The game will be played for six rounds. One of the rounds for the participant and one of the rounds for each spouse will be randomly implemented.
1. Three rounds of fixed endowment (100 Ksh., 150 Ksh., 250 Ksh.): endowment is observable to spouse.
2. Two rounds of lottery endowment: spouse will know that participant drew from a lottery but not the realization. The lottery pays out 0 Ksh. with 10% probability, and 100 Ksh. / 150 Ksh. / 250 Ksh. each with 30% probability.
3. One round of choice: participant chooses between 150 Ksh. fixed endowment (observable to spouse), or lottery endowment (realization unobservable to spouse). The choice is unobservable to the spouse.
Participant couples will be cross randomized in division of the household pot. Husbands and wives will receive 25%/75%, 50%/50%, or 75%/25% respectively of the household pot.
To summarize, a participant who maximizes household income allocates all endowment to the household pot. There are three reasons why a participant may allocate endowment to the private pot: (1) control of resources, as the participant retains full control over resource in the private pot, (2) hiding income, as the resource in private pot is unobservable, and (3) hiding consumption, as the consumption choices from private pot is unobservable. I study whether participants allocate more to the private pot when income is unobservable. In addition, I study whether they choose different types of gifts when income is unobservable and whether they behave differently depending on the share of the household pot they will receive.
Using the household survey, I study whether couples have incomplete knowledge of spousal income, and whether misestimation of spousal income is due to hidden income. The couples will first be surveyed separately, where they are asked about their own income, expenditures, savings, transfers, as well as their knowledge of their spouse's income, expenditures, savings and transfers. At the end of the study, the couples will be asked a few questions together.