In this article we model production technology in a state-contingent framework. Our model analyzes production under uncertainty without regard to the nature of producer risk preferences. In our model producers? risk preferences are captured by the risk-neutral probabilities they assign to the...

Excessive volatility of asset prices like that generated in the 'noise trader'' model of De Long et al. is one factor that plausibly might contribute to an explanation of the equity premium. We extend the De Long et al. model to allow for privatization of publicly-owned assets and assess the...

Insurance contracts are frequently modelled as principal–agent relationships. The purpose of this paper is to examine the interaction between differential bargaining power and the efficiency of insurance contracts. The analysis is undertaken in a framework of state-contingent production, which...

Analysis of the equity premium puzzle has focused on private sector capital markets. The object of this paper is to consider the welfare and policy implications of each of the broad classes of explanations of the equity premium puzzle. As would be expected, the greater the deviation from the...