Economics, Econometrics and Finance
4 years ago

Financial markets lead to inefficiency, contingent markets offer efficient exchange.

RePEc: Research Papers in Economics
Inefficiency of competitive equilibrium with hidden action and financial markets
Luca Panaccione

Paper Summary

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The article explores how different types of markets affect economic efficiency in a complex exchange system. The researchers found that a market structure with contingent markets is efficient, while one with financial and spot markets is inefficient under certain conditions.