Heterogeneity and the formation of risk - sharing coalitions
We offer a new explanation of partial risk sharing based on coalition formation and segmentation of society in a risky environment, without assuming limited commitment and imperfect information. Heterogenous individuals in a society freely choose with whom they will share risk. A partition belonging...
- Autores:
- Tipo de recurso:
- Fecha de publicación:
- 2013
- Institución:
- Universidad del Rosario
- Repositorio:
- Repositorio EdocUR - U. Rosario
- Idioma:
- spa
- OAI Identifier:
- oai:repository.urosario.edu.co:10336/11289
- Acceso en línea:
- https://doi.org/10.48713/10336_11289
http://repository.urosario.edu.co/handle/10336/11289
- Palabra clave:
- Procesos sociales
Risk Sharing
Group Membership
Social Segmentation
Sociología
Grupos sociales
Marginados sociales
Relaciones sociales
Riesgo (Economía)::Aspectos Sociales
- Rights
- License
- http://purl.org/coar/access_right/c_abf2
Summary: | We offer a new explanation of partial risk sharing based on coalition formation and segmentation of society in a risky environment, without assuming limited commitment and imperfect information. Heterogenous individuals in a society freely choose with whom they will share risk. A partition belonging to the core of the membership game obtains. Perfect risk sharing does not necessarily arise. Focusing on mutual insurance rule and assuming that individuals only differ with respect to risk, we show that the core partition is homophily-based. The distribution of risk affects the number and size of these coalitions. Individuals may pay a lower risk premium in riskier societies. A higher heterogeneity in risk leads to a lower degree of risk sharing. We discuss how the endogenous partition of society into risk-sharing coalitions may shed light on empirical evidence on partial risk sharing. The case of heterogenous risk aversion leads to similar results. |
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