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Efficient Risk Sharing with Model Uncertainty

I study risk sharing arrangements in settings characterized with Knightian uncertainty. In general both the demand for insurance and risk perceptions are endogenous and interact in these settings. This paper attempts to identify the key mechanisms affecting insurance in stylized environments differing in two dimensions - market completeness and nature of uncertainty. This in turn has bearing on market price of risk and long-run survival.

Anmol Bhandari, University of Minnesota
Publication Date: 
February, 2013
BFI Initiative: 
Publication Status: