We analyze efficient risk-sharing arrangements when coalitions may deviate. Coalitions form to insure against … idiosyncratic income risk. Self-enforcing contracts for both the original coalition and any deviating coalition rely on a belief in … coalitions, the extent of risk sharing in successfully formed coalitions is declining in the extent of social capital and …

may destabilize insurance arrangements among the larger group. We therefore consider self-enforcing risk … must itself employ some self-enforcing risk-sharing agreement. We observe that the stability of subgroups is inimical to …) bounded size, a result in sharp contrast to the individual-deviation problem, and that the degree of risk-sharing in a …

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 …