Chris Edmond Risk - sharing with endogenous segmentation
نویسنده
چکیده
Preferences and endowments. Consider a static endowment economy populated by a continuum of households. The households have identical preferences expressed by a strictly increasing strictly concave utility function U(c) over a single consumption good. The households have heterogeneous endowments y ∈ [0,∞) of this single consumption good distributed with density f(y) > 0 in the population. Let Y := ∫∞ 0 yf(y)dy denote the aggregate endowment. Now consider a social planner who weights these households equally and seeks to choose a consumption allocation c(y) ≥ 0 for each household type to maximize social welfare ∫ ∞
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