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The Family as an Incomplete Annuities Market Families provide individuals with risk sharing opportunities which may not otherwise be available. Within the family there is a degree of trust and a level of information which alleviates three key problems in the provision of insurance by markets open to the general public, namely, moral hazard, adverse selection, and deception. The informational advantages of pooling risk within families must be set against the inability of families to provide complete insurance because of the small size of the risk pooling group. This paper demonstrates how families can provide insurance against uncertain dates of death. Death risk sharing family arrangements effectively constitute an incomplete annuities market. Our analysis indicates that these arrangements even in small families can substitute by more than 70% for complete annuities. Given the adverse selection problem and transactions costs in public annuity markets, risk pooling in familes may well be preferred to purchasing market annuities. In the absence of organized public markets in annuities, these risk sharing arrangements provide powerful economic incentives for marriage and family formation. The paper suggests that inter-family transfers need have nothing to do with altruistic feelings; rather, they may simply reflect risk sharing behavior of completely selfish family members. The institution of the family provides individuals with risk sharing opportunities which may not otherwise be available. Within the family there is a degree of trust and a level of information which alleviates three key problems in the provision of insurance by markets open to the general public, namely moral hazard, adverse selection, and deception. In addition, provision of insurance within the family may entail smaller transaction costs than arise in the purchase of insurance on the open market. Therearea number of important risks for which the "public" market problems of moral hazard, adverse selection, and deception are especially severe. The risk of loss of job or earnings because of changes in the pattern of demand or partial disability is one example. Here the ability of the "public" market to determine the extent to which the individual contributed to his earnings loss or is simply lying about his backache is highly questionable. Other examples are the risk of bankruptcy and the default risk on personal loans.Many family practices in dealing with these types of risks can be explained as implicit insurance contracts made ex ante by completely selfish family membexs. Love and affection may be important for the enforcement of these implicit contracts, but these need not be their sole or even chief

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