Enforcement with Costly Group Formation

Sudipta Sarangi and Prabirendra Chatterjee ()
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Prabirendra Chatterjee: Louisiana State University

Economics Bulletin, 2005, vol. 15, issue 9, 1-8

Abstract: The joint liability literature claims that positive assortative matching, or risk homogeneity, is always the first best solution. We examine this claim in presence of group formation costs and find that the assertion is not always true.

Keywords: Group; Formation; Costs (search for similar items in EconPapers)
JEL-codes: D8 O1 (search for similar items in EconPapers)
Date: 2005-02-13
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Citations: View citations in EconPapers (2)

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