Heterogeneity and the formation of risk-sharing coalitions

• 成果类型: Article
• 署名作者: Jaramillo, Fernando; Kempf, Hubert; Moizeau, Fabien
• 署名单位: Universidad del Rosario; Universite Paris Saclay; Paris School of Economics; Universite de Rennes; Institut Universitaire de France
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2014.09.003
• 发表日期: 2015
• 页码: 79-96
• 关键词: Risk sharing; Group membership; social segmentation

摘要

We study the relationship between the distribution of individuals' attributes over the population and the extent of risk sharing in a risky environment. We consider a society where individuals voluntarily form risk-sharing groups in the absence of financial markets. We obtain a partition of society into distinct coalitions leading to partial risk sharing. When individuals differ only with respect to risk, the partition is homophily-based: the less risky agents congregate together and reject more risky ones into other coalitions. The distribution of risk affects the number and size of these coalitions. It turns out that individuals may pay a lower risk premium in more risky societies. We show that a higher heterogeneity in risk leads to a lower degree of partial risk sharing. The case of heterogenous risk aversion generates similar results. The empirical evidence on partial risk sharing can be understood when the endogenous partition of society into risk-sharing coalitions is taken into account. (C) 2014 Elsevier B.V. All rights reserved.