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An experimental investigation of risk sharing and adverse selection

Tausch, Franziska; Potters, Jan; Riedl, Arno - In: Journal of Risk and Uncertainty 48 (2014) 2, pp. 167-186

Does adverse selection hamper the effectiveness of voluntary risk sharing? How do differences in risk profiles affect adverse selection? We experimentally investigate individuals’ willingness to share risks with others. Across treatments we vary how risk profiles differ between individuals. We...

Persistent link: https://www.econbiz.de/10010863412

An experimental investigation of risk sharing and adverse selection

Tausch, Franziska; Potters, Jan; Riedl, Arno - In: Journal of risk and uncertainty : JRU 48 (2014) 2, pp. 167-186

Persistent link: https://www.econbiz.de/10010431604

Risk sharing and risk shifting: An historical perspective

Cizakca, Murat - In: Borsa Istanbul Review 14 (2014) 4, pp. 191-195

Islam prohibits risk shifting and encourages risk sharing. Consequently, Muslims have developed over the centuries a highly sophisticated know-how of risk sharing partnerships which was the envy of the world. When Europe borrowed this know-how from the 10th century onwards, it entered into the...

Persistent link: https://www.econbiz.de/10011099459

Heterogeneity and the formation of risk-sharing coalitions

Jaramillo, Fernando; Kempf, Hubert; Moizeau, Fabien - In: Journal of Development Economics 114 (2015) C, pp. 79-96

We study the relationship between the distribution of individuals' attributes over the population and the extent of risk sharing in a risky environment. We consider a society where individuals voluntarily form risk-sharing groups in the absence of financial markets. We obtain a partition of...

Persistent link: https://www.econbiz.de/10011209897

Risk Pooling, Risk Preferences, and Social Networks

Barr, Abigail; Attanasio, Orazio - Department of Economics, Oxford University - 2009

Using data from a field experiment conducted in seventy Colombian municipalities, we investigate who pools risk with whom when risk pooling arrangements are not formally enforced. We explore the roles played by risk attitudes and network connections both theoretically and empirically. We...

Persistent link: https://www.econbiz.de/10011004300

Islamic profit and loss sharing contracting versus regular equity in entrepreneurial finance: Risk sharing and managerial incentives

Hadizada, Abdulali; Nippel, Peter - In: The Journal of Entrepreneurial Finance (JEF) 24 (2022) 2, pp. 209-247

-off depends on the financial contracting between the entrepreneur and the financier. As an alternative to debt or equity, we … consider musharaka financing, an Islamic profit and loss sharing contract. First, we show that debt is inferior to equity or … musharaka even though debt financing ensures first best efforts in our model. Whether financing with equity or by use of …

Persistent link: https://www.econbiz.de/10015108119

Risk sharing in an asymmetric environment

Fesselmeyer, Eric; Mirman, Leonard J.; Santugini, Marc - In: International Review of Economics & Finance 34 (2014) C, pp. 1-8

We study the effect of an asymmetric environment on risk sharing. In our model, entrepreneurs consider undertaking risky projects in the real sector as well as selling part of their projects to investors. To capture the idea of an asymmetric environment, the returns on the alternative risk-free...

Persistent link: https://www.econbiz.de/10011077069

Using Ex Ante Payments in Self-Enforcing Risk-Sharing Contracts

Gauthier, Céline; Poitevin, Michel - Centre Interuniversitaire de Recherche en Analyse des … - 1995

In this paper we analyze a long-term risk-sharing contract between two risk-averse agents facing self-enforcing constraints. We enlarge the contracting space to allow for an ex ante transfer (at the beginning of the period) before the state of nature is realized. We analyze the trade-off between...

Persistent link: https://www.econbiz.de/10005101060

Insurance with frequent trading: A dynamic analysis of efficient insurance markets

Penalva, José - Department of Economics and Business, Universitat … - 2000

This paper extends existing insurance results on the type of insurance contracts needed for insurance market efficiency to a dynamic setting. It introduces continuosly open markets that allow for more efficient asset allocation. It also eliminates the role of preferences and endowments in the...

Persistent link: https://www.econbiz.de/10005248462

A Reconsideration of Arrow-Lind: Risk Aversion, Risk Sharing, and Agent Choice

Fesselmeyer, Eric; Mirman, Leonard J.; Santugini, Marc - Centre Interuniversitaire sur le Risque, les Politiques … - 2012

We consider the original Arrow-Lind framework in which a government undertakes a risky project to be shared among many taxpayers. In our model, the taxpayers decide the level of participation in the risky project. Moreover, the amount of taxes collected by the government fully finances the...

Persistent link: https://www.econbiz.de/10009391788