Mutual Insurance Networks in Communities

Pascal Billand, Christophe Bravard () and Sudipta Sarangi
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Christophe Bravard: GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique

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Abstract: We study the formation of mutual insurance networks in a model where every agent who obtains more resources gives a fixed amount of resources to all agents who have obtained less resources. The low resource agent must be directly linked to the high resource agent to receive this transfer. We identify the pairwise stable networks and efficient networks. Then, we extend our model to situations where agents differ in their generosity with regard to the transfer scheme. We show that there exist conditions under which in a pairwise stable network agents who provide the same level of transfers are linked together, while there are no links between agents who provide high transfers and agents who provide low transfers.

Keywords: Mutual insurance networks; Pairwise stable networks; Effi cient networks (search for similar items in EconPapers)
Date: 2012-12-21
New Economics Papers: this item is included in nep-gth, nep-ias, nep-mic, nep-net and nep-soc
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00768430v1
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Mutual Insurance Networks in Communities (2013)
Working Paper: Mutual Insurance Networks in Communities (2012)
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