Matching to share risk

We consider a matching model in which individuals belonging to two populations (\textquotedblleft males\textquotedblright\ and \textquotedblleft females\textquotedblright ) can match to share their exogenous income risk. Within each population, individuals can be ranked by risk aversion in the Arrow-Pratt sense. The model permits non transferable utility, a context in which few general results have previously been derived. We show that in this framework a stable matching always exists, it is generically unique, and it is negatively assortative: for any two matched couples, the more risk averse male is matched with the less risk averse female.

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