Umfang:
Online-Ressource
ISSN:
1935-1704
Inhalt:
Abstract: This paper develops a model of risk sharing in which each individual’s income shock is locally shared ex-post given an ex-ante strategically formed network. Emphasizing the informational constraint of the network such that transfers can only be contingent on local information, the model provides characterizations of the ex-ante efficient network and the pairwise stable networks. While it is no surprise that the unique efficient network is the complete graph, it is interesting that any pairwise stable network features low average degree and almost 2-regular structures, even under individual risk heterogeneity, and it tends to exhibit positive assortativity in terms of risk variances. If expected incomes are also locally shared in addition to income shocks, the pairwise stable network may become more densely connected, achieving efficiency under certain parameter values.
In:
volume:16
In:
number:2
In:
year:2016
In:
pages:455-484
In:
extent:30
In:
The B.E. journal of theoretical economics, Berlin ; Boston, Mass. : De @Gruyter, 2007-, 16, Heft 2 (2016), 455-484 (gesamt 30), 1935-1704
Sprache:
Englisch
DOI:
10.1515/bejte-2015-0006
URN:
urn:nbn:de:101:1-2408311804045.275622280975
URL:
https://doi.org/10.1515/bejte-2015-0006
URL:
https://nbn-resolving.org/urn:nbn:de:101:1-2408311804045.275622280975
URL:
https://d-nb.info/1340685264/34
