Tizié Bene

I'm a PhD candidate at Aix-Marseille School of Economics. My research interests are network economics, game theory and development economics. My ongoing project studies the interactions between formal insurance and informal insurance in networks

Email: tizie.BENE@univ-amu.fr

Address: 5-9 Bd Maurice Bourdet, 13001 Marseille,, Office 2-27

TwitterX: @BeneTizie

Working Papers

Formal Insurance and Altruism Networks (with Yann Bramoullé & Frédéric Déroïan, Draft: September 2023) Revise & Resubmit at Journal of Development Economics 

Abstract: 

We study how altruism networks affect the demand for formal insurance. Agents with CARA utilities are connected through a network of altruistic relationships. Incomes are subject to a common shock and to a large individual shock, generating heterogeneous damages. Agents can buy formal insurance to cover the common shock, up to a coverage cap. We show that ex-post  altruistic transfers induce interdependence in ex-ante formal insurance decisions. We characterize the Nash equilibria of the insurance game. 

We show that agents act as if they are trying to maximize the expected utility of a representative agent with average damages. We find that the demand for formal insurance is higher with altruism than without altruism at low prices and lower at high prices. Nash equilibria are constrained Pareto efficient. Discrete constraints on insurance decisions have a strong impact and can reverse the interactions between altruism networks and formal insurance.

Job Market Paper

Formal Insurance and Risk-Sharing Networks

This paper examines the influence of formal insurance on the configuration of risk-sharing networks. When facing idiosyncratic risks, agents can choose between forming costly risk-sharing links and purchasing formal insurance.  I characterize the equilibrium of the insurance game and show that an agent's equilibrium demand for formal insurance decreases with the number of agents he can rely on. I find that formal insurance and risk-sharing networks are substitutes. Moreover, the price of formal insurance determines how agents' incentives to form links vary with the number of agents they are connected to. For some price levels, there is multiplicity in the structure of stable networks. When the linking cost is high, the unraveling of the risk-sharing network is gradual, and the number of components in a stable network decreases weakly and progressively as the price of insurance decreases. When the linking cost is low, the unraveling is abrupt and agents go from being connected to the entire community to relying only on the formal insurance.


Work in Progress

Teaching