Segmented risk sharing in a continuous-time setting

Hector Chade and Bart Taub ()
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Bart Taub: Department of Economics, University of Illinois, 1206 S. 6th Street, Champaign, IL 61820, USA

Economic Theory, 2002, vol. 20, issue 4, 645-675

Abstract: The economy we study is comprised of a continuum of individuals. Each has a stochastic endowment that evolves continuously and independently of all other individuals' endowment processes. Individuals are risk averse and would therefore like to insure their endowment processes. The mutual independence of their endowment processes makes it feasible for them to obtain this insurance by pooling their endowments. We investigate whether such a scheme would survive as an equilibrium in a noncooperative setting.

Keywords: Continuous-time methods; Risk sharing; Limited enforcement. (search for similar items in EconPapers)
JEL-codes: C73 D80 E21 (search for similar items in EconPapers)
Date: 2002-03-21
Note: Received: October 16, 2000; revised version: August 8, 2001
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Citations: View citations in EconPapers (5)

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