Informal Insurance, Enforcement Constraints, and Group Formation

We propose a concept of self-enforcing risk-sharing agreement that are robust not only to single-person deviations but also to potential deviations by subgroups, requiring that the deviating subgroup itself employs some self-enforcing risk-sharing agreement. We observe that the stability of subgroups may destabilize insurance arrangements among larger groups. Using this concept of stability, we study different examples.

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Year of publication:	2004-04-03
Institutions:	Georgetown University, Department of Economics ; Garance Genicot, Georgetown University and Debraj Ray, New York University and Instituto de AnÂ´alisis EconÂ´omico (CSIC)

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Classification:	C71 - Cooperative Games ; C73 - Stochastic and Dynamic Games ; D80 - Information and Uncertainty. General ; O16 - Financial Markets; Saving and Capital Investment ; O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005760798