Laczó, Sarolta - In: Journal of Economic Dynamics and Control 46 (2014) C, pp. 237-251
I consider a risk-sharing game with limited commitment, and study how the discount factor above which perfect risk sharing is self-enforcing in the long run depends on agents׳ risk aversion and the riskiness of their endowment. When agents face no aggregate risk, a mean-preserving spread may...