Hedging against risk and the substitution of consumer issued assets by producer issued assets: the role of state specialisation of production processes

Pedro J. Gutierrez

Global Business and Economics Review, 2001, vol. 3, issue 2, 212-232

Abstract: This paper analyses the conditions under which consumer issued assets can be substituted by producer issued assets in the risk hedging process when the uncertainty source is technological. Using a general equilibrium framework, I demonstrate that the generation of state specialised production processes makes consumer issued assets redundant, providing risk cover through investment and eliminating the transaction costs implicit in the consumer issued assets. This mechanism, similar to that of Coase (1937), allows the profit from such state specialisation to be calculated, contributing to the development of the firm theory under uncertainty.

Keywords: risk hedging; uncertainty; consumer issued assets; producer issued assets; firm theory; state specialised production processes; insurance markets. (search for similar items in EconPapers)
Date: 2001
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=6173 (text/html)
Access to full text is restricted to subscribers.

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:ids:gbusec:v:3:y:2001:i:2:p:212-232

Access Statistics for this article

More articles in Global Business and Economics Review from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().