Econometrica: May 1973, Volume 41, Issue 3

Markets for an Exchange Economy with Individual Risks

https://doi.org/0012-9682(197305)41:3<383:MFAEEW>2.0.CO;2-#
p. 383-410

E. Malinvaud

What can we say about the competitive equilibrium price system for an uncertain economy in which each risk concerns just one individual? Three interrelated concepts of equilibrium are considered. They show how and under which conditions the contingent price for a contract to deliver one unit of some good if some event occurs tends to be equal to the product of the sure price of the good and the probability of the event.

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