Abstract
A reduction in the output of productive assets (trees) in some contingencies may expand the range of risks spanned by the payoffs of assets and allow for better risk sharing; which may compensate for the loss of output and support a Pareto superior allocation. Surprisingly, if short sales of assets are not allowed, improved risk sharing that results from the destruction of output does not suffice to support a Pareto superior allocation.
| Original language | English |
|---|---|
| Pages (from-to) | 120-124 |
| Number of pages | 4 |
| Journal | Journal of Mathematical Economics |
| Volume | 67 |
| Early online date | 29 Sept 2016 |
| DOIs | |
| Publication status | Published - 1 Dec 2016 |
Keywords
- short sales
- destruction
- welfare
