Formal insurance and altruism networks
研究利他网络如何影响人们对正式保险的需求，发现利他行为会促使低损失者增加保险购买、高损失者减少购买，且总体需求在低价时上升、高价时下降。
We study how altruism networks affect the demand for formal insurance. Agents with CARA utilities are connected through a network of altruistic relationships. Incomes are subject to a common shock and to a large individual shock, generating heterogeneous damages. Agents can buy formal insurance to cover the common shock, up to a coverage cap. We find that ex-post altruistic transfers induce interdependence in ex-ante formal insurance decisions. We characterize the Nash equilibria of the insurance game and show that agents act as if they are trying to maximize the expected utility of a representative agent with average damages. Altruism thus tends to increase demand of low-damage agents and to decrease demand of high-damage agents. Its aggregate impact depends on the interplay between demand homogenization, the zero lower bound and the coverage cap. We find that aggregate demand is higher with altruism than without altruism at low prices and lower at high prices. Nash equilibria are constrained Pareto efficient. • Altruism networks impact insurance demand under common shocks with varied damages. • Altruism yields demand homogenization. • Altruism decreases aggregate demand for formal insurance at relatively high prices. • Altruism boosts overall demand for formal insurance at low prices with a coverage cap. • Altruism’s impact hinges on demand homogenization, zero lower bound, and coverage cap.