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Correction for “Collateral premia and risk sharing under limited commitment” [Econ. Theory 46, 475–501 (2011)]

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Listed:
  • Weerachart Tee Kilenthong

    (University of the Thai Chamber of Commerce)

Abstract

This note provides a correction for Lemma 4 in Kilenthong (Econ Theory 46:475–501, 2011). As pointed out in Zierhut (Econ Theory Bull, 2013), Assumption 2 in Kilenthong (Econ Theory 46:475–501, 2011) is not sufficient to guarantee that optimal allocations will be full risk sharing as claimed in Lemma 4 in Kilenthong (Econ Theory 46:475–501, 2011). This note shows that the main result still holds for an economy in which risk sharing rule is linear by providing a corrected sufficient condition for full risk sharing.

Suggested Citation

  • Weerachart Tee Kilenthong, 2014. "Correction for “Collateral premia and risk sharing under limited commitment” [Econ. Theory 46, 475–501 (2011)]," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(1), pages 115-118, April.
    • Handle: RePEc:spr:etbull:v:2:y:2014:i:1:d:10.1007_s40505-013-0028-y
    DOI: 10.1007/s40505-013-0028-y
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    References listed on IDEAS

    as
    1. Weerachart Kilenthong, 2011. "Collateral premia and risk sharing under limited commitment," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 46(3), pages 475-501, April.
    2. Michael Zierhut, 2014. "Comment on “Collateral premia and risk sharing under limited commitment” [Econ. Theory 46, 475–501 (2011)]," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(1), pages 111-113, April.
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    More about this item

    Keywords

    Collateral premium; Collateralized contracts; Limited commitment; Full risk sharing;
    All these keywords.

    JEL classification:

    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets

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