(with Francis Bloch and Garance Genicot), Journal of Economic Theory143, 36-58, 2008.
Summary. This paper studies bilateral insurance schemes across networks of individuals. We investigate the structure of self-enforcing insurance networks. Network links play two distinct and possibly conflictual roles. They act as conduits for both transfers and information; affecting the scope for insurance and the severity of punishments upon noncompliance. Their interaction leads to a characterization of stable networks as suitably “sparse” networks. Thickly and thinly connected networks tend to be stable, whereas intermediate degrees of connectedness jeopardize stability.
(with Paula Onuchic), October 2019, revised December 2022. Forthcoming, Theoretical Economics.
A sender is about to come into possession of an object of heterogeneous quality. Prior to knowing that quality, she commits to a categorization. That is, she partitions the set of qualities intosubsets — some possibly singletons — and verifiably commits to reveal the element in which the quality belongs. The categoriesmust be monotone. Our main results fully describe the profit-maximizing categorizationfor any pair of priors over object quality held by sender and receiver. We apply these results to the design of educational grades.
Summary. This is the first part of a two-part article which develops a theory of involuntary unemployment and the incidence of undernourishment, relates these in turn to the production and distribution of income, and ultimately to the distribution of productive assets. In this part, we study the general equilibrium of such a framework and describe its properties.
