The Role of Asset Trade in Solving Coordination Problems.

Asset trading resolves coordination problems in most currently existing models of coordination failure. We argue that a principal limitation of these models is their ignoring idiosyncratic and aggregate uncertainty in investment returns. We introduce such uncertainty in a standard model of investment coordination while simultaneously closing down all other avenues leading to coordination failures.

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Year of publication:	1997
Authors:	Baland, J-M ; Francois, P
Institutions:	Faculté des Sciences Économiques, Sociales et de Gestion (FSESG), Université de Namur
Subject:	TRADE \| INVESTMENTS

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Series:	Notre-Dame de la Paix, Sciences Economiques et Sociales.
Type of publication:	Book / Working Paper
Notes:	27 pages
Classification:	F19 - Trade. Other
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005475040