limitation of possible risk sharing via private contracts. The welfare consequences of a change in the tax system depend on the … relative magnitudes of increased risk sharing forced by the new tax system and the reduced risk sharing in private insurance … less risk sharing among individuals and lower ex-ante welfare …

We analyze efficient risk-sharing arrangements when the value from deviating is determined endogenously by another risk … sharing arrangement. Coalitions form to insure against idiosyncratic income risk. Self-enforcing contracts for both the … facilitates the initial formation of coalitions, the extent of risk sharing in successfully formed coalitions is declining in the …