IDEAS home Printed from https://ideas.repec.org/p/wrk/wcreta/12.html
   My bibliography  Save this paper

Short Sales, Destruction of Resources, Welfare

Author

Listed:
  • Kokonas, Nikos

    (Department of Economics, University of Bath)

  • Polemarchakis, Herakles

    (Department of Economics, University of Warwick)

Abstract

A reduction in the output of productive assets (trees) in some states of the world can expand the span of payoffs of assets; and, improved risk sharing 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 induce a Pareto superior allocation.

Suggested Citation

  • Kokonas, Nikos & Polemarchakis, Herakles, 2015. "Short Sales, Destruction of Resources, Welfare," CRETA Online Discussion Paper Series 12, Centre for Research in Economic Theory and its Applications CRETA.
    • Handle: RePEc:wrk:wcreta:12
    as

    Download full text from publisher

    File URL: https://warwick.ac.uk/fac/soc/economics/research/centres/creta/papers/manage/12-short_sales_destruction_of_resources_welfare.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Donsimoni, M. -P. & Polemarchakis, H. M., 1994. "Redistribution and welfare," Journal of Mathematical Economics, Elsevier, vol. 23(3), pages 235-242, May.
    2. John Geanakoplos & Heracles M. Polemarchakis, 1985. "Existence, Regularity, and Constrained Suboptimality of Competitive Allocations When the Asset Market Is Incomplete," Cowles Foundation Discussion Papers 764, Cowles Foundation for Research in Economics, Yale University.
    3. Aumann, R. J. & Peleg, B., 1974. "A note on Gale's example," Journal of Mathematical Economics, Elsevier, vol. 1(2), pages 209-211, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kokonas, Nikos & Polemarhakis, Herakles, 2015. "Short sales, destruction of resources, welfare," Economic Research Papers 269723, University of Warwick - Department of Economics.
    2. Kokonas, Nikos & Polemarchakis, Herakles, 2015. "Short Sales, Destruction of Resources, Welfare," The Warwick Economics Research Paper Series (TWERPS) 1102, University of Warwick, Department of Economics.
    3. Kokonas, Nikolaos & Polemarchakis, Herakles, 2016. "Short sales, destruction of resources, welfare," Journal of Mathematical Economics, Elsevier, vol. 67(C), pages 120-124.
    4. Kubler, F. & Chiappori, P. -A. & Ekeland, I. & Polemarchakis, H. M., 2002. "The Identification of Preferences from Equilibrium Prices under Uncertainty," Journal of Economic Theory, Elsevier, vol. 102(2), pages 403-420, February.
    5. Sergio Turner, 2006. "How much trade does the transfer paradox require? The threshold computed," Working Papers 2006-02, Brown University, Department of Economics.
    6. Kang, Minwook & Ye, Lei Sandy, 2014. "Coalition-enhancing fiscal policies in an open economy: A CES framework of Gale’s transfer paradox," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 141-147.
    7. KÜBLER, Felix & POLEMARCHAKIS, Heracles, 1999. "The identification of preferences from the equilibrium prices of commodities and assets," LIDAM Discussion Papers CORE 1999033, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Lionel DE BOISDEFFRE, 2015. "Existence of financial equilibrium with differential information: the no-arbitrage characterization," Working Papers 2015-2016_5, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Nov 2015.
    9. Dimitrios Tsomocos, 2003. "Equilibrium analysis, banking, contagion and financial fragility," FMG Discussion Papers dp450, Financial Markets Group.
    10. Sergio Turner, 2004. "Pareto Improving Taxation in Incomplete Markets," Econometric Society 2004 Latin American Meetings 310, Econometric Society.
    11. John Geanakoplos, 2013. "Leverage, default, and forgiveness: lessons from the American and European crises," Special Conference Papers 27, Bank of Greece.
    12. Lionel De Boisdeffre, 2015. "Existence of financial equilibrium with differential information: the no-arbitrage characterization," Working Papers hal-02945462, HAL.
    13. Levine, David K., 1989. "Infinite horizon equilibrium with incomplete markets," Journal of Mathematical Economics, Elsevier, vol. 18(4), pages 357-376, September.
    14. William Thomson, 2014. "New variable-population paradoxes for resource allocation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(2), pages 255-277, February.
    15. Ma, Chang, 2020. "Financial stability, growth and macroprudential policy," Journal of International Economics, Elsevier, vol. 122(C).
    16. Piero Gottardi & Rohit Rahi, 2014. "Value Of Information In Competitive Economies With Incomplete Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(1), pages 57-81, February.
    17. Anton Korinek & Joseph E. Stiglitz, 2018. "Artificial Intelligence and Its Implications for Income Distribution and Unemployment," NBER Chapters, in: The Economics of Artificial Intelligence: An Agenda, pages 349-390, National Bureau of Economic Research, Inc.
    18. Gromb, Denis & Vayanos, Dimitri, 2002. "Equilibrium and welfare in markets with financially constrained arbitrageurs," Journal of Financial Economics, Elsevier, vol. 66(2-3), pages 361-407.
    19. Krueger, Dirk & Ludwig, Alexander & Villalvazo, Sergio, 2021. "Optimal taxes on capital in the OLG model with uninsurable idiosyncratic income risk," Journal of Public Economics, Elsevier, vol. 201(C).
    20. Zierhut, Michael, 2019. "Nonexistence of constrained efficient production plans," Journal of Mathematical Economics, Elsevier, vol. 83(C), pages 127-136.

    More about this item

    Keywords

    short sales ; destruction ; welfare JEL classification numbers: D52 ; D61;
    All these keywords.

    JEL classification:

    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wrk:wcreta:12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Margaret Nash (email available below). General contact details of provider: https://edirc.repec.org/data/dewaruk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.