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Informal risk-sharing cooperatives: the effect of learning and other-regarding preferences

Author

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  • Victorien Barbet

    (Aix-Marseille University, CNRS, EHESS, Centrale Marseille, AMSE)

  • Renaud Bourlès

    (Aix-Marseille University, CNRS, EHESS, Centrale Marseille, AMSE)

  • Juliette Rouchier

    (LAMSADE, CNRS, [UMR 7243], Université Paris-Dauphine, PSL Research University)

Abstract

We study the dynamics of risk-sharing cooperatives among heterogeneous agents. Based of their knowledge on their risk exposure and the performance of the cooperatives, agents choose whether or not to remain in the risk-sharing agreement. We highlight the key role of other-regarding preference (altruism and inequality aversion) in stabilizing less segregated (and smaller) cooperatives. Limited knowledge and learning of own risk exposure also contributes to reducing segregation, the two effects (of learning and other-regarding preferences) being complementary. Our findings shed light on the mechanisms behind risk-sharing agreements between agents heterogeneous in their risk exposure.

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  • Victorien Barbet & Renaud Bourlès & Juliette Rouchier, 2020. "Informal risk-sharing cooperatives: the effect of learning and other-regarding preferences," Journal of Evolutionary Economics, Springer, vol. 30(2), pages 451-478, April.
    • Handle: RePEc:spr:joevec:v:30:y:2020:i:2:d:10.1007_s00191-019-00644-9
    DOI: 10.1007/s00191-019-00644-9
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    1. Victorien Barbet & Renaud Bourlès & Juliette Rouchier, 2020. "Informal risk-sharing cooperatives: the effect of learning and other-regarding preferences," Journal of Evolutionary Economics, Springer, vol. 30(2), pages 451-478, April.

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    More about this item

    Keywords

    Agent-based; Cooperative; Risk-sharing; Learning; Altruism; Other-regarding preferences;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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