Matching to share risk

Pierre-André Chiappori () and Philip Reny ()
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Pierre-André Chiappori: Department of Economics, Columbia University

Theoretical Economics, 2016, vol. 11, issue 1

Abstract: We consider a matching model in which individuals belonging to two populations (\textquotedblleft males\textquotedblright\ and \textquotedblleft females\textquotedblright ) can match to share their exogenous income risk. Within each population, individuals can be ranked by risk aversion in the Arrow-Pratt sense. The model permits non transferable utility, a context in which few general results have previously been derived. We show that in this framework a stable matching always exists, it is generically unique, and it is negatively assortative: for any two matched couples, the more risk averse male is matched with the less risk averse female.

Keywords: Negatively assortative matching; risk-sharing; stable match (search for similar items in EconPapers)
JEL-codes: C78 D00 (search for similar items in EconPapers)
Date: 2016-01-30
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Citations: View citations in EconPapers (31)

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