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Risk sharing in a federation with population mobility and long horizons

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  • Arman Mansoorian
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    Abstract

    In this paper risk sharing among individuals within and across regions in a federation with population mobility and infinite horizons is considered. It is shown that the regional authorities will not fully exploit gains from interregional risk sharing when population mobility is imperfect. In the Nash equilibrium there is complete risk sharing among the individuals within each region, however, which corresponds to the policies of the central authority. Regional authorities who care about their reputation may be able to commit to an efficient allocation. It is possible that improvements in the degree of mobility will make such commitments likely.

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    Bibliographic Info

    Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

    Volume (Year): 33 (2000)
    Issue (Month): 3 (August)
    Pages: 662-676

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    Handle: RePEc:cje:issued:v:33:y:2000:i:3:p:662-676

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    Cited by:
    1. Tim Lohse & Julio R. Robledo, 2012. "Public Self-Insurance and the Samaritan‘s Dilemma in a Federation," Ruhr Economic Papers 0330, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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