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Insurance, Flexibility and Non-contingent Trades

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Author Info
Russell Cooper
Abstract

This paper considers non-contingent trades through either forward markets or simple contracts. The point of the inquiry is to understand the costs and benefits of trades of this nature. We focus on the tradeoff between insurance (a benefit) and the loss of flexibility in decisions (a cost) as determining properties of trading in forward markets. This tradeoff is also used to explore contract length.

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File URL: http://cowles.econ.yale.edu/P/cd/d06b/d0691.pdf
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Paper provided by Cowles Foundation, Yale University in its series Cowles Foundation Discussion Papers with number 691.

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Length: 33 pages
Date of creation: Feb 1984
Date of revision:
Handle: RePEc:cwl:cwldpp:691

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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA

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  1. Yohe, Gary Wynn, 1977. "Comparisons of price and quantity controls: A survey," Journal of Comparative Economics, Elsevier, vol. 1(3), pages 213-233, September. [Downloadable!] (restricted)
  2. Russell Cooper & Beth Hayes, 1983. "Multiperiod Insurance Contracts," Cowles Foundation Discussion Papers 673R, Cowles Foundation, Yale University, revised 1984. [Downloadable!]
  3. Harris Milton & Townsend, Robert M, 1981. "Resource Allocation under Asymmetric Information," Econometrica, Econometric Society, vol. 49(1), pages 33-64, January. [Downloadable!] (restricted)
  4. Ross, Stephen A, 1981. "Some Stronger Measures of Risk Aversion in the Small and the Large with Applications," Econometrica, Econometric Society, vol. 49(3), pages 621-38, May. [Downloadable!] (restricted)
  5. Eaton, Jonathan, 1980. "Price Variability, Utility and Savings," Review of Economic Studies, Blackwell Publishing, vol. 47(3), pages 513-20, April. [Downloadable!] (restricted)
  6. Batra, Raveendra N & Russell, William R, 1974. "Gains from Trade Under Uncertainty," American Economic Review, American Economic Association, vol. 64(6), pages 1040-48, December. [Downloadable!] (restricted)
  7. Grossman, Sanford J., 1977. "A characterization of the optimality of equilibrium in incomplete markets," Journal of Economic Theory, Elsevier, vol. 15(1), pages 1-15, June. [Downloadable!] (restricted)
  8. Eaton, Jonathan, 1979. "The Allocation of Resources in an Open Economy with Uncertain Terms of Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(2), pages 391-403, June. [Downloadable!] (restricted)
  9. Dionne, G., 1981. "Adverse Selection and Repeated Insurance Contracts," Cahiers de recherche 8139, Universite de Montreal, Departement de sciences economiques.
  10. Arrow, Kenneth J, 1974. "Limited Knowledge and Economic Analysis," American Economic Review, American Economic Association, vol. 64(1), pages 1-10, March.
  11. Hart, Oliver D., 1975. "On the optimality of equilibrium when the market structure is incomplete," Journal of Economic Theory, Elsevier, vol. 11(3), pages 418-443, December. [Downloadable!] (restricted)
  12. Townsend, Robert M, 1978. "On the Optimality of Forward Markets," American Economic Review, American Economic Association, vol. 68(1), pages 54-66, March. [Downloadable!] (restricted)
  13. Stiglitz, Joseph E, 1982. "The Inefficiency of the Stock Market Equilibrium," Review of Economic Studies, Blackwell Publishing, vol. 49(2), pages 241-61, April. [Downloadable!] (restricted)
  14. Baron, David P, 1970. "Price Uncertainty, Utility, and Industry Equilibrium in Pure Competition," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 11(3), pages 463-80, October. [Downloadable!] (restricted)
  15. Costas Azariadis & Russell Cooper, 1983. "Predetermined Prices and the Allocation of Social Risks," Cowles Foundation Discussion Papers 660, Cowles Foundation, Yale University. [Downloadable!]
    Other versions:
  16. Gray, Jo Anna, 1978. "On Indexation and Contract Length," Journal of Political Economy, University of Chicago Press, vol. 86(1), pages 1-18, February. [Downloadable!] (restricted)
  17. Goldman, Steven Marc, 1974. "Flexibility and the demand for money," Journal of Economic Theory, Elsevier, vol. 9(2), pages 203-222, October. [Downloadable!] (restricted)
  18. Weitzman, Martin L, 1974. "Prices vs. Quantities," Review of Economic Studies, Blackwell Publishing, vol. 41(4), pages 477-91, October. [Downloadable!] (restricted)
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  19. Turnovsky, Stephen J, 1974. "Technological and Price Uncertainty in a Ricardian Model of International Trade," Review of Economic Studies, Blackwell Publishing, vol. 41(2), pages 201-17, April. [Downloadable!] (restricted)
  20. Dreze, Jacques H. & Modigliani, Franco, 1972. "Consumption decisions under uncertainty," Journal of Economic Theory, Elsevier, vol. 5(3), pages 308-335, December. [Downloadable!] (restricted)
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