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The Value of Information in Efficient Risk-Sharing Arrangements Author info | Abstract | Publisher info | Download info | Related research | Statistics Edward E. Schlee
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Suppose that agents share risks in competitive markets. We show that better information makes everyone worse off if the economy has a representative agent--that is, the economy's demand for state-contingent consumption equals the demand of a hypothetical agent who owns all the economy's wealth. The representative agent, moreover, is normatively unrepresentative: although each agent dislikes information, the "representative" agent is indifferent. Although we emphasize pure exchange, our results imply that a representative-agent model might seriously misstate the welfare effects of improved information in an economy with production and risk sharing, even if it performs well otherwise.
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Article provided by American Economic Association in its journal American Economic Review .
Volume (Year): 91 (2001)
Issue (Month): 3 (June)
Pages: 509-524
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Handle: RePEc:aea:aecrev:v:91:y:2001:i:3:p:509-524Contact details of provider: Email: Web page: http://www.aeaweb.org/aer/ More information through EDIRC
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Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Juan Hatchondo, 2004.
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Piero Gottardi & Rohit Rahi, 2007.
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2007_25, University of Venice "Ca' Foscari", Department of Economics.
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Other versions: Ezra Einy & Diego Moreno & Benyamin Shitovitz, 2002.
"The Value Of Public Information In A Cournot Duopoly ,"
Economics Working Papers
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[Downloadable!]
Other versions: Edward Schlee & Christian Gollier, .
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Other versions: Juan Carlos Hatchondo, 2005.
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Bernhard Eckwert & Burkhard Drees, 2007.
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Andrea Morone, 2005.
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Bernhard Eckwert & Itzhak Zilcha, 2003.
"The Effect of Better Information on Income Inequality ,"
CESifo Working Paper Series
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[Downloadable!]
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