Informal Risk Sharing in an Infinite‐Horizon Experiment
نویسندگان
چکیده
منابع مشابه
Informal Risk Sharing in an Infinite-horizon Experiment
This paper presents the first laboratory study of risk-sharing without commitment. Our experiment captures the main features of a simple model of voluntary insurance between two agents. In the model, two individuals interact over a potential infinite horizon and suffer random income shocks. Risk-averse individuals have incentives to smooth consumption by making transfers to each other. These tr...
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This paper posits a new approach to informal risk-sharing in developing countries. A risk-sharing rule is a collective choice which is individually enforced through peer-pressure. I determine the elected rule and the level of compliance. Full risk-sharing is achieved only if everybody complies. Partial risk-sharing arises more often with, sometime, some level of non-compliance. In many cases, a...
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T his study aims to demonstrate that joining in risk sharing network leads to the reduction in incomes volatility. In this respect, income variance for a group of members in an informal insurance is modelled in which income variance prior to joining risk sharing network and after joining is analyzed statistically. A Monte Carlo simulation technique is used to prove the result. To extend an...
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In rural economies with missing or incomplete markets, idiosyncratic risk is frequently pooled through informal networks. Idiosyncratic shocks, however, are not limited to private goods but can also restrict an individual from partaking in or benefitting from a collective activity. In these situations, a group must decide whether to provide insurance to the affected member. In this paper, we de...
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ژورنال
عنوان ژورنال: The Economic Journal
سال: 2009
ISSN: 0013-0133,1468-0297
DOI: 10.1111/j.1468-0297.2009.02248.x