The Relevance of Extrinsic Uncertainty

Heracles M. Polemarchakis and Luigi Ventura
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Heracles M. Polemarchakis: Department of Economics - Brown University, CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain = Catholic University of Louvain

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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.

Keywords: extrinsic risk; competitive equilibrium.; competitive equilibrium (search for similar items in EconPapers)
Date: 2000
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Published in 2000

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Related works:
Journal Article: The Relevance of Extrinsic Uncertainty (2001)
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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