Mutual Insurance Networks in Communities

Pascal Billand, Christophe Bravard () and Sudipta Sarangi ()
Additional contact information
Christophe Bravard: Université Grenoble 2 ; UMR 1215 GAEL, F-38000 Grenoble, France ; CNRS, GATE Lyon St Etienne, Saint-Etienne, F-42000, France
Sudipta Sarangi: DIW Berlin and Louisiana State University

No 1234, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: We study the formation of mutual insurance networks in a model where every agent who obtains more resources gives a fixed amount of resources to all agents who have obtained less resources. The low resource agent must be directly linked to the high resource agent to receive this transfer. We identify the pairwise stable networks and efficient networks. Then, we extend our model to situations where agents differ in their generosity with regard to the transfer scheme. We show that there exist conditions under which in a pairwise stable network agents who provide the same level of transfers are linked together, while there are no links between agents who provide high transfers and agents who provide low transfers.

Keywords: Mutual insurance networks; Pairwise stable networks; Efficient networks (search for similar items in EconPapers)
JEL-codes: C72 D8 D81 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-gth, nep-ias, nep-mfd, nep-mic, nep-net and nep-soc
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Citations: View citations in EconPapers (2)

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ftp://ftp.gate.cnrs.fr/RePEc/2012/1234.pdf (application/pdf)

Related works:
Working Paper: Mutual Insurance Networks in Communities (2013)
Working Paper: Mutual Insurance Networks in Communities (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:1234

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