The Relevance of Extrinsic Uncertainty

Héraclès M. Polemarchakis and Luigi Ventura

Annals of Economics and Statistics, 2001, issue 62, 175-191

Abstract: When the asset market is incomplete extrinsic risk is effective at competitive equilibrium allocations; this is the case whether commodities are exchanged indirectly, through the exchange of assets, or whether assets serve to transfer revenue and commodities are exchanged in spot markets. Individuals bear extrinsic risk for the benefit of exchanging commodities or transferring revenue in the absence of complete markets for the allocation of intrinsic risk.

Date: 2001
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Related works:
Working Paper: The relevance of extrinsic uncertainty (2000)
Working Paper: The Relevance of Extrinsic Uncertainty (2000)
Working Paper: The relevance of extrinsic uncertainty (1995)
Working Paper: The Relevance of Extrinsic Uncertainty (1995)
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2001:i:62:p:175-191

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