(b) Contracts negotiated under Part 15 may be of any type or combination of species that promote the interest of the government, unless this Part is restricted (see 10 U.S.C.2306(a) and 41 U.S.C.3901). Types of contracts which are not described in this Regulation may only be used if there is a deviation in accordance with section 1.4. The results of our model showed that the introduction of formal insurance can have serious consequences, even if insured households maintain private transfers. Informal risk sharing is only effective with a sufficient number of strong actors. Insured households that make no contributions or can only make a small contribution due to premium payments reduce the strength of informal transfers. Similarly, in the case of covariate shocks, which affect many households at the same time, purely informal risk management cannot be considered effective. In this case, the solidarity of insured households helps to save some uninsured households, making formal insurance a valuable complement to informal private transfers. As extreme weather events such as droughts or floods that cause such shocks are expected to occur more frequently in the context of climate change [12-15], formal assurance will become increasingly important in the future. In any case, the resilience of financial resources to shocks is highest among insured households. In general, households may benefit financially from not investing in any form of risk protection, but this comes at the expense of a small number of uninsured households that can survive and are therefore the riskiest option. Participation in informal risk management on social media reduces this risk while leading to individual budgets on average higher than those of insured households. From this point of view, it is understandable that insured households may stop contributing to uninsured households. Looking at the proportion of surviving households for different risk management tools and insurance rates (Fig.
1), we find that informal transfers, regardless of the transfer decision, have a positive impact on survival rates. To unravel the impact of insurance and the decisions behind informal transfers, we looked separately at the survival rates of uninsured households. In order to make our observations comparable between scenarios with different numbers of insured households, we always present the results for the same subgroup of households. The survival rate of uninsured households is lower when insurance is available than when households cover their risks only through informal risk sharing (Fig. 2). For the external conditions chosen, the introduction of insurance therefore has a negative impact on uninsured households. Even if insured households continue to show solidarity, the introduction of insurance reduces the survival rate of uninsured households: shortly after introduction, the same number of uninsured households have to leave the system as if insured households refused to contribute to informal transfers. Only in the long term does the solidarity of insured households have a positive effect on uninsured households.
(2) The uncertainties associated with the performance of the contract do not allow costs to be estimated with sufficient precision to use any type of fixed-price contract. (ii) Discuss the additional risks to the government and the burden of managing the type of contract chosen (p.B. if a repayment contract is chosen, the government takes risks of additional costs and the government has the additional burden of managing the contractor`s costs). For such examples, procurement staff should discuss the following: To combat poverty, the poorest and most vulnerable households need opportunities to recover from financial losses resulting from climate-related extreme events or other unexpected shocks. Microinsurance products are presented as effective tools to meet this challenge. With this study, we wanted to assess the possible long-term consequences of introducing such formal insurance systems in communities where informal risk-sharing agreements between smallholder farmers prevail. Given that empirical studies have shown how diversified household transfer behaviour can be after taking out insurance [19, 21-26], it is important to explicitly consider transfer decisions when assessing the effectiveness of the combination of these risk management instruments. To systematically distinguish between situations where formal insurance complements existing risk-sharing agreements and situations where there are adverse consequences for the resilience of smallholder farmers, we developed an agent-based model with formal and informal insurance options and combined it with social media analysis.
We explicitly considered two behavioural implications of insurance availability in informal transfers: We assumed that households insured on the social network would continue to enter into informal risk-sharing agreements or reject transfers after taking out formal insurance. Once you are about to sell a contract or deal, there are 2 things that set the priority for this action: income and security. SellMyForms takes care of you to take both. (c) In the context of an acquisition programme, a series of contracts or a single long-term contract, changing circumstances may make a different type of contract appropriate in later periods than the one used at the beginning. In particular, contracting entities should avoid prolonged recourse to reimbursement or a contract for time and equipment after experience has provided a basis for price fixing. (2) In order to ensure the binding nature of the contract, the minimum quantity is greater than a nominal quantity, but must not exceed the quantity that the government will almost certainly order. Try PMC Labs and let us know what you think. Find out more.
To mitigate income shocks, households can use informal safety nets. Households are connected in a non-directional network where they can ask for money from other households and give money. The network is imposed during model initialization and kept constant (i.e. static) for a simulation. We have set up networks of small worlds according to the watts-strogatz model . This algorithm creates a regular ring network where every household on both sides is connected to NN/2 neighbors and each link is rewired with probabilitypr. Microinsurance is presented as a valuable tool for low-income households to cushion financial losses due to health or climate risks. However, in addition to the direct positive effects, these formal insurance schemes may have unintended side effects when insured households reduce their contribution to traditional informal arrangements where risk is shared through private monetary support.
Using a stylized agent-based model, we assess the impact of microinsurance on the resilience of smallholder farmers on a social network who cannot afford this financial instrument. We explicitly include decision-making behaviour in informal transfers. We note that the introduction of formal insurance can have negative side effects, even if insured households are willing to contribute to informal risk arrangements. However, if many households are affected by a shock at the same time, for example by . B of droughts or floods, formal insurance is a valuable addition to informal risk sharing. By explicitly considering the long-term effects of short-term transfer decisions, our study complements existing empirical research. The results of the model underline that new insurance programmes need to be developed in close coordination with established risk management instruments. Only then can they be effective without weakening the functional aspects of informal risk management, which could lead to an increase in poverty. It has been found that households reduce their willingness to provide informal support when they do not themselves need risk coverage other than insurance. Conversely, in the case of index insurance in Ethiopia, household survey results suggest that the availability of insurance may favour informal transfers, as insured households are better able to help [25, 26].
Theoretical models show, on the one hand, that the introduction of insurance can lead to a decrease in social benefits due to the reduction of private transfers [27, 28], but also that informal safety nets and microinsurance can complement each other in the presence of a fundamental risk – the potential mismatch between actual losses and insurance payments received [7, 29]. (b) where predetermined incentives for technical performance or implementation of the formula type are included, increases in profits or royalties shall be granted only for the achievement of objectives exceeding the targets and reductions shall be provided for where those objectives are not achieved; Incentive increases or reductions are applied to performance targets and not to minimum performance requirements. (a) The types of fixed-price contracts provide for a fixed price or, where appropriate, an adjustable price. .