Informal Insurance, Enforcement Constraints, and Group Formation

Garance Genicot, Georgetown University and Debraj Ray, New York University and Instituto de An´alisis Econ´omico (CSIC) ()
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Garance Genicot, Georgetown University and Debraj Ray, New York University and Instituto de An´alisis Econ´omico (CSIC): Department of Economics, Georgetown University, http://www.georgetown.edu/faculty/gg58/
Authors registered in the RePEc Author Service: Debraj Ray () and Garance Genicot ()

Working Papers from Georgetown University, Department of Economics

Abstract: We propose a concept of self-enforcing risk-sharing agreement that are robust not only to single-person deviations but also to potential deviations by subgroups, requiring that the deviating subgroup itself employs some self-enforcing risk-sharing agreement. We observe that the stability of subgroups may destabilize insurance arrangements among larger groups. Using this concept of stability, we study different examples.

JEL-codes: C71 C73 D80 O16 O17 (search for similar items in EconPapers)
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