Group insurance against common shocks
نویسندگان
چکیده
Abstract We study insurance against common shocks in cooperatives and other productive groups of individuals. In those groups, and due to strategic interactions among group members, insurance decisions may be preferably taken at the group level rather than the individual level. We highlight two kinds of potential problems with individual insurance: the first one is a free-riding problem because due to strategic interactions, insurance decisions exert a positive externality on other group members; the second one is a coordination problem that occurs because it may be unprofitable for an individual to take insurance if the others in the group do not. Both types of problems can be resolved if insurance is o↵ered at the group level. JEL Codes: D14, D81, G22.
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تاریخ انتشار 2011