EconPapers    
Economics at your fingertips  
 

Informal insurance in social networks

Francis Bloch, Garance Genicot and Debraj Ray

Journal of Economic Theory, 2008, vol. 143, issue 1, 36-58

Abstract: This paper studies bilateral insurance schemes across networks of individuals. While transfers are based on social norms, individuals must have the incentive to comply. We investigate the structure of self-enforcing insurance networks. Network links play two distinct and possibly conflictual roles. They act as conduits for both transfers and information; affecting the scope for insurance and the severity of punishments upon noncompliance. Their interaction leads to a characterization of stable networks as suitably "sparse" networks. Thickly and thinly connected networks tend to be stable, whereas intermediate degrees of connectedness jeopardize stability. Finally, we discuss the effect of discounting on stability.

Keywords: Social; networks; Reciprocity; network; Risk; sharing; Norms; Informal; insurance; Sparseness; Stable; networks (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (131)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022-0531(08)00036-7
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Informal Insurance in Social Networks (2005) Downloads
Working Paper: Informal Insurance in Social Networks (2004) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:143:y:2008:i:1:p:36-58

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2025-03-23
Handle: RePEc:eee:jetheo:v:143:y:2008:i:1:p:36-58