Implications of Endogenous Group Formation for Efficient Risk‐Sharing
修正了现有子博弈完美风险分担文献中关于群体协调能力的不一致假设，刻画了所有联盟防策略的历史依赖契约，并推导出有限承诺下内生群体形成的正式检验方法。
The existing literature on sub-game perfect risk-sharing suffers from a basic inconsistency. While a group of size "n" is able to coordinate on a risk-sharing outcome, it is assumed that deviating subgroups cannot. I relax this assumption and characterise the optimal contract among all coalition-proof history-dependent contracts. This alters the predictions of the standard dynamic limited commitment model. I show that the consumption of constrained agents depends on both the history of shocks and its interaction with the current income of other constrained agents. From this, I derive a formal test for the presence of endogenous group formation under limited commitment. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009.