General Equilibrium in a Labor-Managed Economy with Uncertainty and Incomplete Markets

Richard Kihlstrom and Jean-Jacques Laffont
Additional contact information
Richard Kihlstrom: University of Pennsylvania

Annals of Economics and Finance, 2002, vol. 3, issue 1, 185-217

Abstract: This paper studies the free entry competitive equilibria of a labor managed economy when there are less than complete contingent claims markets. First, we prove the existence of a simple labor management equilibrium which is inefficient in the Diamond sense. Second, we introduce an insurance system internal to the firm and show that the resulting equilibrium exists and is Diamond efficient. This insurance system plays for a labor managed economy the same role as fixed obligation debt markets in an entrepreneurial stock market equilibrium.

Keywords: Labor-management; Uncertainty; Incomplete markets; General equilibrium (search for similar items in EconPapers)
JEL-codes: D5 D8 J5 (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://aeconf.com/Articles/May2002/aef030111.pdf (application/pdf)
http://down.aefweb.net/AefArticles/aef030111.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2002:v:3:i:1:p:185-217

Access Statistics for this article

Annals of Economics and Finance is currently edited by Heng-fu Zou

More articles in Annals of Economics and Finance from Society for AEF Contact information at EDIRC.
Bibliographic data for series maintained by Qiang Gao ().