Journal: Economic Theory

Abbreviation

Econ. theory

Publisher

Springer

Journal Volumes

ISSN

0938-2259
1432-0479

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Publications 1 - 10 of 15
  • Existence of equilibria in exhaustible resource markets with economies of scale and inventories
    Item type: Journal Article
    Bommier, Antoine; Bretschger, Lucas; Le Grand, François Louis (2017)
    Economic Theory
    The paper proves the existence of equilibrium in non-renewable resource markets when extraction costs are non-convex and resource storage is possible. Inventories flatten the consumption path and eliminate price jumps at the end of the extraction period, so that market equilibrium becomes possible. We distinguish between two types of solutions, one with immediate and one with delayed buildup of inventories. For both cases, we do not only characterize potential optimal paths but also show that equilibria actually exist under fairly general conditions. It is found that optimum resource extraction involves increasing quantities over a period of time. What is generally interpreted as an indicator of increasing resource abundance is thus perfectly compatible with constant resource stocks.
  • Crisis Contracts
    Item type: Journal Article
    Aptus, Elias; Britz, Volker; Gersbach, Hans (2020)
    Economic Theory
  • When inefficiency begets efficiency
    Item type: Journal Article
    Gersbach, Hans; Haller, Hans (2005)
    Economic Theory
  • Incomplete markets and derivative assets
    Item type: Journal Article
    Le Grand, François Louis; Ragot, Xavier (2016)
    Economic Theory
    We analyze derivative asset trading in an economy in which agents face both aggregate and uninsurable idiosyncratic risks. Insurance markets are incomplete for idiosyncratic risk and, possibly, for aggregate risk as well. However, agents can exchange insurance against aggregate risk through derivative assets such as options. We present a tractable framework, which allows us to characterize the extent of risk sharing in this environment. We show that incomplete insurance markets can explain some properties of the volume of traded derivative assets, which are difficult to explain in complete market economies.
  • Inequality aversion and separability in social risk evaluation
    Item type: Journal Article
    Fleurbaey, Marc; Zuber, Stéphane (2013)
    Economic Theory
  • Contract withdrawals and equilibrium in competitive markets with adverse selection
    Item type: Journal Article
    Mimra, Wanda; Wambach, Achim (2019)
    Economic Theory
    In competitive common value adverse selection markets, existence of a pure strategy equilibrium is often justified by appealing to Wilson’s (J Econ Theory 16(2):167–207, 1977) concept of ‘anticipatory equilibrium.’ The anticipatory equilibrium is based on the notion that all market participants expect unprofitable contracts to be withdrawn. We present a model of individual contract withdrawals that captures the strategic process underlying the anticipatory equilibrium concept: We introduce an additional—endogenously ending—stage into the Rothschild and Stiglitz (Q J Econ 90(4):629–649, 1976) model in which initial contracts can be withdrawn repeatedly after observation of competitors’ contract offers and withdrawals. Individual contract withdrawal allows for a rich strategic interaction. We show that an equilibrium exists where consumers obtain their respective second-best efficient Miyazaki–Wilson–Spence (MWS) contracts. However, this equilibrium requires latent contracts on offer. Furthermore, any individually rational and incentive-compatible allocation that earns nonnegative profits on aggregate can be sustained as equilibrium allocation. We further allow for contract addition as in Riley’s (Econometrica 47(2):331–359, 1979) ‘reactive equilibrium.’ Allowing for contract addition does not change the set of possible outcomes.
  • Cumulative prospect theory and the St. Petersburg paradox
    Item type: Journal Article
    Oliver, Marc; Wang, Mei (2006)
    Economic Theory
  • The affectionate society
    Item type: Journal Article
    Gersbach, Hans; Haller, Hans (2009)
    Economic Theory
  • A bargaining theory of the firm
    Item type: Journal Article
    Britz, Volker; Herings, P. Jean-Jacques; Predtetchinski, Arkadi (2013)
    Economic Theory
  • Household formation and markets
    Item type: Journal Article
    Gersbach, Hans; Haller, Hans; Konishi, Hideo (2015)
    Economic Theory
Publications 1 - 10 of 15