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Optimum Allocation of Risk in a Market With Many Traders

  • Yaffa Caspi
Part of the International Economic Association Series book series (IEA)

Abstract

In a market with ‘many’ traders who bear risks, there is the possibility of pooling their independent risks and in this way to eliminate traders’ risks. There is a benefit from trade, and the way this benefit is divided between the traders depends on the system of exchange.

Keywords

Optimum Allocation Pareto Optimum Large Market Competitive Equilibrium Initial Endowment 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Notes

  1. [1]
    K. J. Arrow, ‘The Role of Securities in the Optimal Allocation of Risk-Bearing’, Review of Economic Studies vol. XXXI (1964), pp. 91–6.CrossRefGoogle Scholar
  2. [2]
    K. Borch, ‘The Safety Loading of Reinsurance Premiums’, Skandinavisk Aktuarietidskrift vol. XLIII (1960), pp. 163–84.Google Scholar
  3. [3]
    G. Debreu and H. Scarf, ‘A Limit Theorem on the Core of an Economy’, International Economic Review; vol. IV (1963), pp. 235–46.CrossRefGoogle Scholar
  4. [4]
    P. A. Samuelson, ‘General Proof that Diversification Pays’, Journal of Financial and Quantitative Analysis vol. II (1967), pp. 1–13.CrossRefGoogle Scholar
  5. [5]
    L. J. Savage, The Foundations of Statistics (New York: Wiley, 1954).Google Scholar

Copyright information

© International Economic Association 1974

Authors and Affiliations

  • Yaffa Caspi
    • 1
  1. 1.The Hebrew UniversityJerusalemIsrael

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