Abstract
Consider a two-period economy with uncertainty in the second period. Consumption is in terms of a single consumer good. In the second period there are S many possible states and every consumer aims to maximize the consumption across states. There are I many consumers with utility functions U i(strictly increasing, concave and continuous). The consumption good has a price π s in each state.
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Hens, T., Rieger, M.O. (2019). 4 Two-Period Model: State-Preference Approach. In: Solutions to Financial Economics. Springer Texts in Business and Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-59889-4_4
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DOI: https://doi.org/10.1007/978-3-662-59889-4_4
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Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-662-59887-0
Online ISBN: 978-3-662-59889-4
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