 On Optimality of Intergenerational Risk SharingDELTA Working Papers from DELTA (Ecole normale supérieure) Abstract: This paper studies optimality in dynamic stochastic economies with finitely lived agents. In this set up, an agent's utility level depends on the date at which it is evaluated, and on the available information at that date. A family of Pareto optimality concepts may be defined accordingly, with two polar cases, interim and ex ante optimality. Sufficient or necessary conditions for an allocation to be optimal are first obtained, extending an approach developed in riskless OLG models. When applied to an equilibrium in an economy in which land is transacted and markets are sequentially complete, these conditions emphasize the importance of short run efficiency. If markets are incomplete, whereas the standard approach cannot be used, sufficient conditions for interim optimality are provided in two period lived overlapping generations economies. They extend the efficiency properties of an equilibrium with land and the well known Samuelson interest rate condition to a constrained set up. Keywords: RISK; UTILITY FUNCTION; CONSUMPTION (search for similar items in EconPapers) Published in Economic Theory, 2002, 20, pp. 1-27. There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:del:abcdef:2000-05 Access Statistics for this paper More papers in DELTA Working Papers from DELTA (Ecole normale supérieure) Contact information at EDIRC. |
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