portfolio theory, but the real issue today relates to the practical implementation of the theory introduced by Harry Markowitz … FINANCE -- CAUSALITY -- SUMMARY -- Chapter 4: Common Pitfalls in Financial Modeling -- THEORY AND ENGINEERING -- ENGINEERING …

given period, after having observed her income, the agent can walk away from the contract, while the intermediary cannot, i … intermediaries. Insurance can be provided because in an equilibrium contract an up-front payment effectively locks in the agent with … an intermediary. We then show that our contract economy is equivalent to a consumption-savings economy with one …