Workshop "The Theory and Empirics of Risk Sharing"
October 22-23, 2009, Toulouse, France
In economies where resources are uncertain, risk sharing mechanisms enable to reallocate goods for consumption in a more efficient way than resources are. Nevertheless, efficiency requires complete markets. Since the seminal paper of Townsend (1994) who rejected the hypothesis of complete markets, for instance in village economies like India, various empirical analyses led to a better understanding of sources of market failures and to a better identification of the characteristics of agents that are affected by these failures. The economic literature about village economies emphasizes the problem of self-enforcement of agreements. Such informal agreements enable to enhance the efficiency of the collective allocation of resources although their self-enforcing nature imposes constraints that allow for partial risk sharing only. Some recent articles demonstrate the empirical relevance of such an approach (Ligon, Thomas and Worrall (2002), Dubois, Jullien and Magnac (2008)) and the workshop intends to gather the main contributors of this literature and to present the recent developments of the theory and empirics of risk sharing.
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