The Political Economics of Risk-sharing Arrangements (научный семинар ЛИА)

In a series of recent publications, Genicot and Ray (2003, 2007) and Bloch, Genicot, and Ray (2007) coupled advances of the non-cooperative coalition formation theory with the condition that only self-enforcing coalitions (that is, defined by a proper recursion) are allowed to deviate in equilibrium. Acemoglu, Egorov, and Sonin (2008) use a similar concept in a political context. We consider a game which combine features of both Genicot and Ray (2003) and Acemoglu, Egorov, and Sonin (2008) to study operation of stable insurance arrangements in an environment where the majority might impose its rule over the rest of the society. It turns out that the requirement of political stability has a non-trivial impact on the size of stable coalitions.

Рабочий язык семинара – русский.