Abstract
People vote over risk-sharing rules to cope with random revenues. Risk-sharing rules are enforced through peer pressure: those who comply exert a negative externality on those who do not. People are difierently afiected by this externality. I determine the elected risk-sharing rules and the level of compliance. It turns out that full risk-sharing is achieved only if everybody complies . Partial risk-sharing is more often achieved with, sometime, some level of non-compliance. In many cases, a majority of people votes over and complies with the risk-sharing rule that maximizes their own expected payofi.
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