Cole, Harold L.; Krueger, Dirk; Mailath, George J.; … - 2022
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 …