Evolving Informal Risk-Sharing Cooperatives and Other-Regarding Preferences
In this paper we present a model of formation and destruction of informal cooperatives in a population of agents who perform a risky activity and who are heterogeneous in terms of success in their actions. Although some agents have high-risk and others low-risk, our model displays a dynamics with cooperatives in which agents share equally their income with a certain stability. We are interested in studying at the same time the existence of cooperatives, their ability to integrate a large proportion of agents and the degree of segregation of these cooperatives. Three factors can explain the existence, stability and lack of segregation. First, we show that the classical explanation in economics holds within the framework of our model: when agents are risk averse, high success agents can share with low success agents so that to stabilize the value of their income - the higher the risk aversion, the more stable the cooperatives and the lower the segregation. Learning can explain in a small proportion the existence of cooperatives: we designed agents so that they have to learn whether they are high or low-risk, and while they are learning, they tend to create cooperatives that can last. Eventually we worked on the integration of other-regarding preferences in the model, with two different definitions. As expected, the influence of other-regarding preferences is to increase stability and decrease segregation, and the two models of rationality react differently to the type of network in which the agents are immersed. This paper, mainly exploratory, presents our model and shows the influence of the definition of network as well as all other factors presented before. In that sense, although we have mainly done a rough exploration of its relevant parameters for the moment, it exposes different insights that can be gained by its study.
|Date of creation:||Dec 2012|
|Date of revision:||Dec 2012|
|Contact details of provider:|| Web page: http://www.amse-aixmarseille.fr/en|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Townsend, Robert M, 1994.
"Risk and Insurance in Village India,"
Econometric Society, vol. 62(3), pages 539-591, May.
- Townsend, R.M., 1991. "Risk and Insurance in Village India," University of Chicago - Economics Research Center 91-3, Chicago - Economics Research Center.
- Robert M. Townsend, "undated". "Risk and Insurance in Village India," University of Chicago - Population Research Center 91-3a, Chicago - Population Research Center.
- Thomas Brenner, 2004.
"Agent Learning Representation - Advice in Modelling Economic Learning,"
Papers on Economics and Evolution
2004-16, Philipps University Marburg, Department of Geography.
- Brenner, Thomas, 2006. "Agent Learning Representation: Advice on Modelling Economic Learning," Handbook of Computational Economics, in: Leigh Tesfatsion & Kenneth L. Judd (ed.), Handbook of Computational Economics, edition 1, volume 2, chapter 18, pages 895-947 Elsevier.
- repec:dau:papers:123456789/4392 is not listed on IDEAS
- Fernando Jaramillo & Hubert Kempf & Fabien Moizeau, 2013.
"Heterogeneity and the formation of risk - sharing coalitions,"
DOCUMENTOS DE TRABAJO
011013, UNIVERSIDAD DEL ROSARIO.
- Jaramillo, Fernando & Kempf, Hubert & Moizeau, Fabien, 2015. "Heterogeneity and the formation of risk-sharing coalitions," Journal of Development Economics, Elsevier, vol. 114(C), pages 79-96.
- Fernando Jaramillo & Hubert Kempf & Fabien Moizeau, 2015. "Heterogeneity and the formation of risk-sharing coalitions," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01075648, HAL.
- Fabien MOIZEAU & Fernando JARAMILLO & Hubert KEMPF, 2011. "Heterogeneity and the Formation of Risk-Sharing Coalitions," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201111, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
- Donald Meyer & Jack Meyer, 2005. "Relative Risk Aversion: What Do We Know?," Journal of Risk and Uncertainty, Springer, vol. 31(3), pages 243-262, December.
- Rouchier, Juliette & Bousquet, Francois & Requier-Desjardins, Melanie & Antona, Martine, 2001. "A multi-agent model for describing transhumance in North Cameroon: Comparison of different rationality to develop a routine," Journal of Economic Dynamics and Control, Elsevier, vol. 25(3-4), pages 527-559, March.
- Marcel Fafchamps & Flore Gubert, 2005.
"The Formation of Risk Sharing Networks,"
DT/2005/13, DIAL (Développement, Institutions et Mondialisation).
- Ingela Alger & Jörgen Weibull, 2009.
"Kinship, Incentives and Evolution,"
- Ernst Fehr & Klaus M. Schmidt, "undated".
"A Theory of Fairness, Competition and Cooperation,"
IEW - Working Papers
004, Institute for Empirical Research in Economics - University of Zurich.
- Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
- Fehr, Ernst & Schmidt, Klaus M., . "A theory of fairness, competition, and cooperation," Chapters in Economics, University of Munich, Department of Economics.
- Fehr, Ernst & Schmidt, Klaus M., 1999. "A theory of fairness, competition, and cooperation," Munich Reprints in Economics 20650, University of Munich, Department of Economics.
- Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers 1812, C.E.P.R. Discussion Papers.
- Roth, Alvin E. & Erev, Ido, 1995. "Learning in extensive-form games: Experimental data and simple dynamic models in the intermediate term," Games and Economic Behavior, Elsevier, vol. 8(1), pages 164-212.
- Fafchamps, Marcel & Lund, Susan, 2003.
"Risk-sharing networks in rural Philippines,"
Journal of Development Economics,
Elsevier, vol. 71(2), pages 261-287, August.
- Marcel Fafchamps & Susan Lund, "undated". "Risk Sharing Networks in Rural Philippines," Working Papers 97014, Stanford University, Department of Economics.
- Marcel Fafchamps & Susan Lund, 2000. "Risk-Sharing Networks in Rural Philippines," Economics Series Working Papers 10, University of Oxford, Department of Economics.
- A. Roth & I. Er’ev, 2010. "Learning in Extensive Form Games: Experimental Data and Simple Dynamic Models in the Intermediate Run," Levine's Working Paper Archive 387, David K. Levine.
- Raj Chetty, 2006.
"A New Method of Estimating Risk Aversion,"
American Economic Review,
American Economic Association, vol. 96(5), pages 1821-1834, December.
- Sonia Moulet & Juliette Rouchier, 2009.
"The influence of seller learning and time constraints on sequential bargaining in an artificial perishable goods market,"
- Moulet, Sonia & Rouchier, Juliette, 2008. "The influence of seller learning and time constraints on sequential bargaining in an artificial perishable goods market," Journal of Economic Dynamics and Control, Elsevier, vol. 32(7), pages 2322-2348, July.
- Renaud Bourlès & Dominique Henriet, 2012. "Risk-sharing Contracts with Asymmetric Information," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 37(1), pages 27-56, March.
- Marcle Fafchamps, 1999. "Risk sharing and quasi-credit," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 8(3), pages 257-278.
- Bloch, Francis & Genicot, Garance & Ray, Debraj, 2008.
"Informal insurance in social networks,"
Journal of Economic Theory,
Elsevier, vol. 143(1), pages 36-58, November.
- Francis Bloch & Garance Genicot, 2005. "Informal Insurance in Social Networks," 2005 Meeting Papers 156, Society for Economic Dynamics.
- Francis Bloch (GREQAM and Universite de la Mediterranee), Garance Genicot (Georgetown University, and Debraj Ray (New York University and Instituto de Analisis Economico (CSIC)), 2004. "Informal Insurance in Social Networks," Working Papers gueconwpa~04-04-16, Georgetown University, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:aim:wpaimx:1243. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Yves Doazan)
If references are entirely missing, you can add them using this form.