Coalition-Proof Implementation of Competitive Equilibria on a Constrained Reinsurance Market.

We derive from Bernis [2000] a strategic mechanism which fully implements the set of competitive equilibria on a dynamically incomplete reinsurance market VIA Nash equilibria. The mechanism is feasible, and such that the set of coalition proof Nash equilibria coincides with that of Nash equilibria. We thus provide a general framework for the design of decentralized mechanisms on the reinsurance market whose outcomes are efficient even when collusion among insurers is allowed.