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Informal Risk-Sharing Cooperatives: The Effect of Learning and Other-Regarding Preferences

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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 preferences, both altruism and inequality aversion, in stabilizing less segregated (and smaller) cooperatives. Limited knowledge and learning of own risk exposure also contributes to reducing segregation. Our finding shed light on the mechanisms behind risk-sharing agreements between agents heterogeneous in their risk exposure.

Suggested Citation

  • Victorien Barbet & Renaud Bourlès & Juliette Rouchier, 2017. "Informal Risk-Sharing Cooperatives: The Effect of Learning and Other-Regarding Preferences," AMSE Working Papers 1706, Aix-Marseille School of Economics, France.
    • Handle: RePEc:aim:wpaimx:1706
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    Cited by:

    1. Krendelsberger, Alexandra & Alpizar, Francisco & Syll, Mame Mor Anta & van Dijk, Han, 2025. "Climate change, collective shocks, and intra-community cooperation: Evidence from a public good experiment with farmers and pastoralists," World Development, Elsevier, vol. 189(C).
    2. 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.

    More about this item

    Keywords

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    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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