Advanced Search
MyIDEAS: Login to save this article or follow this journal

Incomplete Markets and Incentives to Set Up an Options Exchange*

Contents:

Author Info

  • Franklin Allen

    (University of Pennsylvania)

  • Douglas Gale

    (University of Pittsburgh)

Abstract

Traditional analyses with incomplete markets take the securities that are traded as exogenous. In this paper we endogenize the market structure by considering incentives to introduce (costly) options exchanges which issue derivative securities. The method of financing the exchange is critical in determining whether the market structure is socially efficient. If the exchange can charge fees to all agents and make every agent's participation a necessary condition for establishing the exchange then the market structure chosen in equilibrium is efficient. However, if either of these conditions is not satisfied then an inefficient market structure may be chosen. The Geneva Papers on Risk and Insurance Theory (1990) 15, 17–46. doi:10.1007/BF01498458

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.palgrave-journals.com/grir/journal/v15/n1/pdf/grir19902a.pdf
File Function: Link to full text PDF
Download Restriction: Access to full text is restricted to subscribers.

File URL: http://www.palgrave-journals.com/grir/journal/v15/n1/full/grir19902a.html
File Function: Link to full text HTML
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Palgrave Macmillan in its journal The Geneva Papers on Risk and Insurance Theory.

Volume (Year): 15 (1990)
Issue (Month): 1 (March)
Pages: 17-46

as in new window
Handle: RePEc:pal:genrir:v:15:y:1990:i:1:p:17-46

Contact details of provider:
Web page: http://www.palgrave-journals.com/

Order Information:
Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
Email:
Web: http://www.palgrave-journals.com/pal/subscribe/index.html

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Enrique L. Kawamura, 2000. "Investor´s Distrust and the Marketing of New Financial Assets," Working Papers, Universidad de San Andres, Departamento de Economia 23, Universidad de San Andres, Departamento de Economia, revised Apr 2004.
  2. Prechac, Christophe, 1996. "Existence of equilibrium in incomplete markets with intermediation costs," Journal of Mathematical Economics, Elsevier, vol. 25(3), pages 373-380.
  3. Allen, Franklin & Carletti, Elena, 2006. "Credit risk transfer and contagion," Journal of Monetary Economics, Elsevier, Elsevier, vol. 53(1), pages 89-111, January.
  4. Calvet, Laurent & Gonzalez-Eiras, Martín & Sodini, Paolo, 2004. "Financial Innovation, Market Participation, and Asset Prices," Journal of Financial and Quantitative Analysis, Cambridge University Press, Cambridge University Press, vol. 39(03), pages 431-459, September.
  5. Jose Marin & Rohit Rahi, 1996. "Information Revelation and Market Incompleteness," Archive Working Papers, Birkbeck, Department of Economics, Mathematics & Statistics 024, Birkbeck, Department of Economics, Mathematics & Statistics.
  6. Bohn, Henning, 1995. "Towards a theory of incomplete financial markets A review essay," Journal of Monetary Economics, Elsevier, Elsevier, vol. 36(2), pages 433-449, November.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pal:genrir:v:15:y:1990:i:1:p:17-46. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elizabeth Gale).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.