What problems may arise from having too many participants

Reference no: EM131916020

Problem

1. Evaluate the following statement: "Enforcement is a major issue in Rotating Savings and Credit Associations (ROSCAs), yet ROSCAs do not easily fall apart in practice." Explain why.

2. Consider again the problem described in appendix 3A, and show that the expected utility of a participating member of a ROSCA is increasing with the number of members n. What problems may arise from having too many participants in a ROSCA?

Reference no: EM131916020

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