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Organizations in economic analysis


  • John H. Boyd
  • Edward C. Prescott
  • Bruce D. Smith


Three economic environments are reviewed, and in each organizations play an essential role. For an adverse selection insurance economy, we find that when mutual insurance arrangements are permitted an equilibrium necessarily exists and is optimal. This example, and the two others, illustrate the problems that may result from imposing organizational structure on an environment rather than permitting the structure to be determined endogenously.

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  • John H. Boyd & Edward C. Prescott & Bruce D. Smith, 1988. "Organizations in economic analysis," Working Papers 385, Federal Reserve Bank of Minneapolis.
  • Handle: RePEc:fip:fedmwp:385

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    References listed on IDEAS

    1. Sargent, Thomas J, 1976. "A Classical Macroeconometric Model for the United States," Journal of Political Economy, University of Chicago Press, vol. 84(2), pages 207-237, April.
    2. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    3. Franco Modigliani, 1977. "The monetarist controversy; or, should we forsake stabilization policies?," Economic Review, Federal Reserve Bank of San Francisco, issue Spr suppl, pages 27-46.
    4. Tobin, James, 1977. "How Dead Is Keynes?," Economic Inquiry, Western Economic Association International, vol. 15(4), pages 459-468, October.
    5. T. Muench & A. Rolnick & N. Wallace, 1974. "Tests for Structural Change and Prediction Intervals for the reduced Forms of Two Structural Models of the U.S.: The FRB-MIT and Michigan Quarterly Models," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 3, number 3, pages 491-519 National Bureau of Economic Research, Inc.
    6. Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
    7. Thomas J. Sargent & Christopher A. Sims, 1977. "Business cycle modeling without pretending to have too much a priori economic theory," Working Papers 55, Federal Reserve Bank of Minneapolis.
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    Cited by:

    1. Pierre Picard, 2014. "Participating Insurance Contracts and the Rothschild-Stiglitz Equilibrium Puzzle," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 39(2), pages 153-175, September.
    2. Zou, L., 1989. "Ownership structure and efficiency : An incentive mechanism approach," Discussion Paper 1989-55, Tilburg University, Center for Economic Research.
    3. Kilenthong, Weerachart T. & Qin, Cheng-Zhong, 2014. "Trade through endogenous intermediaries," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 262-268.
    4. Cheng Wang & Stephen D. Williamson, 1993. "Adverse Selection in Credit Markets with Costly Screening," Finance 9310001, EconWPA, revised 10 Nov 1993.
    5. Emiliya Lazarova & Peter Borm & Bas Velzen, 2011. "Coalitional games and contracts based on individual deviations," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 19(2), pages 507-520, December.
    6. Krasa, Stefan, 1999. "Unimprovable Allocations in Economies with Incomplete Information," Journal of Economic Theory, Elsevier, vol. 87(1), pages 144-168, July.
    7. Lacker, Jeffrey & Weinberg, John A, 1993. "A Coalition Proof Equilibrium for a Private Information Credit Economy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(2), pages 279-296, April.
    8. Hakenes, Hendrik & Schnabel, Isabel, 2006. "The Threat of Capital Drain: A Rationale for Public Banks?," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 107, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    9. repec:eee:finana:v:52:y:2017:i:c:p:252-259 is not listed on IDEAS
    10. Christopher Ferrall & Kjell G. Salvanes & Erik Ø. Sørensen, 2009. "Wages And Seniority When Coworkers Matter: Estimating A Joint Production Economy Using Norwegian Administrative Data," Working Papers 1200, Queen's University, Department of Economics.
    11. Kahn, Charles M. & Mookherjee, Dilip, 1995. "Market failure with moral hazard and side trading," Journal of Public Economics, Elsevier, vol. 58(2), pages 159-184, October.
    12. Asheim, Geir B. & Nilssen, Tore, 1996. "Non-discriminating renegotiation in a competitive insurance market," European Economic Review, Elsevier, vol. 40(9), pages 1717-1736, December.
    13. Zou, Liang, 1992. "Ownership structure and efficiency: An incentive mechanism approach," Journal of Comparative Economics, Elsevier, vol. 16(3), pages 399-431, September.
    14. Alberto Bisin & Piero Gottardi, 2006. "Efficient Competitive Equilibria with Adverse Selection," Journal of Political Economy, University of Chicago Press, vol. 114(3), pages 485-516, June.
    15. Jeffrey M. Lacker & John A. Weinberg, 1995. "The coalition-proof core in adverse selection economies," Working Paper 94-09, Federal Reserve Bank of Richmond.
    16. Daripa, Arup, 2008. "Optimal collective contract without peer information or peer monitoring," Journal of Development Economics, Elsevier, vol. 86(1), pages 147-163, April.

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