Bibtex export
@book{ Lohse2012, title = {Public self-insurance and the Samaritan's dilemma in a federation}, author = {Lohse, Tim and Robledo, Julio R.}, year = {2012}, series = {Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Schwerpunkt Märkte und Politik, Forschungsprofessur und Projekt The Future of Fiscal Federalism}, pages = {25}, volume = {SP II 2012-103}, address = {Berlin}, publisher = {Wissenschaftszentrum Berlin für Sozialforschung gGmbH}, abstract = {Motivated by recent disasters, this paper analyzes the risk sharing aspect in a federation. The regions can be hit by a shock leading to losses that occur with an exogenous probability and in a stochastically independent way. The regions can spend effort on selfinsurance to reduce the size of the loss. Being part of a federation has two countervailing-elfare effects. On the one hand, there is the well known welfare increase due to risk pooling. On the other hand, the self-insurance effort is a public good, because all regions benefit from the reduction of the loss. There exists a Samaritan's dilemma kind of effect whereby regions reduce their self-insurance effort potentially leading to an overall welfare decrease. The central government can solve this dilemma by committing to fixed rather than variable transfers. This induces regions that behave non-cooperatively to still choose the efficient level of self-insurance effort. (author's abstract)}, keywords = {Theorie; theory; Transfer; transfer; Staat; national state; Politik; politics; Katastrophe; disaster; Finanzausgleich; fiscal equalization}}