The Impact of Risk Sharing on Efficient Decision.

B-Tier
Journal: Journal of Risk and Uncertainty
Year: 1989
Volume: 2
Issue: 3
Pages: 219-34

Authors (2)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

A group of risk-averse members must choose among monetary risks and payoff-sharing rules. Departure from the status quo requires unanimous consent. Such groups drill for oil, bail out nations, and make hostile takeover bids. Assume agreement on probabilities. As is well known, if all members have identically shaped HARA utility functions, efficient group act-choices follow another such function independently of payoff sharing. We show that all other groups inevitably have complex efficient behavior, accepting gambles among individually unacceptable lotteries in almost every status quo position. We also develop proper risk aversion for groups, and treat disagreement on probabilities. Copyright 1989 by Kluwer Academic Publishers

Technical Details

RePEc Handle
repec:kap:jrisku:v:2:y:1989:i:3:p:219-34
Journal Field
Theory
Author Count
2
Added to Database
2026-01-29