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Anonymity and individual risk

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  • Labadie, Pamela

Abstract

Adverse selection economies with private information are generally studied under the assumption that contracts are exclusive. That is, retrading is prohibited. An alternative market mechanism, the anonymous mechanism, is studied here. Risk averse agents trade contingent claims directly and side markets are in equilibrium. The result is the anonymous equilibrium. The anonymous equilibrium results in a set of endogenous transfers and subsidies.

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  • Labadie, Pamela, 2009. "Anonymity and individual risk," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2440-2453, November.
    • Handle: RePEc:eee:jetheo:v:144:y:2009:i:6:p:2440-2453
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    1. Thomas Mariotti, 2016. "Multiple Contracting in Insurance Markets," 2016 Meeting Papers 820, Society for Economic Dynamics.
    2. Ohanian, Lee E. & Prescott, Edward C. & Stokey, Nancy L., 2009. "Introduction to dynamic general equilibrium," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2235-2246, November.

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