In this paper, we study a two-period pure exchange economy with idiosyncratic uncertainty, moral hazard and multiple consumption goods. We consider two different market structures: contingent commodity markets on the one hand, and financial plus spot commodity markets on the other hand. We...

We consider an economy where individuals privately choose effort and trade competitively priced securities that pay off with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then standard functional formrestrictions ensure that...

We consider an economy where individuals privately choose effort and trade competitively priced securities that pay off with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then standard functional form restrictions ensure that...

This paper studies the efficiency of competitive equilibria in environments with a moral hazard problem and unobserved states, both with retrading in ex post spot markets. The interaction between private information problems and the possibility of retrade creates an externality, unless...

Recent analyses often use one-good models to explain why the least developed countries have little income growth. While a one-good model permits only supply side considerations, a multiple-goods framework enables analysing income growth differences from both the supply and the demand sides....

Payment entitlements is a new commodity that arises from the new European common agricultural policy. The agricultural subsidies are decoupled from the actual production and replaced by the so-called payment entitlements. A payment entitlement has a farm specific value and may be freely traded....