A Rotating Credit and Savings Association (ROSCA) is made up of a group of individuals who pool their money into a common fund, generally structured around monthly contributions, and a single member withdraws the money from it as a lump sum (the 'pot') at the end of each period; in one cycle each member withdraws the pot exactly once. ROSCA is quite common in developing countries. It is an example of:
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Choice under uncertainty has come up 27 times in 7 exams since 2007.
This question is on Insurance, risk sharing and intertemporal choice, part of Choice under uncertainty in Microeconomics.
How insurance and saving let people smooth consumption across states and over time.
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Question from the DSE 2021 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.