The Social Dilemma of Microinsurance: A Framed Field Experiment On Free-Riding and Coordination in Microcredit Groups

This paper analyses free-riding and coordination problems in health microinsurance in Tanzania. Microinsurance games played with microcredit clients confirm that less risk averse clients are tempted to free-ride and forgo individual insurance 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.