Suppose the utility of income to a peasant household is equal to Y, and the probability of a flood (which ruins all of the household's crops) is equal to p. This would yield an income of zero. If there is no flood, the household earns Y. The head of the household is considering either working as a day laborer for a fixed wage w, which he earns whether it floods or not, or farming his own plot. How big must be the yield of his crop (when there is no flood) for him to prefer the risk of having his own plot to the fixed wage? How does your answer depend on w and p?

What kinds of qualities is a peasant likely to have that would give him a high Shapley value in a solidarity network? What does this imply about what he should receive for being part of the network?