This paper establishes that when there is not a complete set of markets but more than one commodity the stock market equilibrium will not in general be a constrained Pareto optimum. The economy will lack both the property of exchange and production efficiency. Necessary conditions which must be satisfied if the economy is to be a constrained Pareto optimum for all technologies are derived; if all individuals have identical, homothetic indifference maps, then either there must be unitary price elasticities (so there is no effective risk) or all individuals must have the same degree of risk aversion (so there is no trade on the stock market).

Stiglitz establishes the relationship between monopoly, non-linear pricing, and imperfect information in the insurance market.

Symposium on Economics of Information: Introduction Joseph E. Stiglitz Joseph E. Stiglitz Stanford University and Oxford University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 44, Issue 3, October 1977, Pages 389–391, https://doi.org/10.2307/2296897 Published: 01 October 1977

Journal Article Growth with Exhaustible Natural Resources: The Competitive Economy Get access Joseph E. Stiglitz Joseph E. Stiglitz St Catherine's College, Oxford and Stanford University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 41, Issue 5, December 1974, Pages 139–152, https://doi.org/10.2307/2296378 Published: 01 December 1974

Journal Article Incentives and Risk Sharing in Sharecropping Get access Joseph E. Stiglitz Joseph E. Stiglitz Yale University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 41, Issue 2, April 1974, Pages 219–255, https://doi.org/10.2307/2296714 Published: 01 April 1974

The paper shows that between two competitive but risky economies with no insurance markets, free trade may be Pareto inferior to no trade. The model is simple enough to show clearly the role prices play in transferring and sharing risk when there is an incomplete set of markets, but rich enough to exhibit the resulting inefficiencies dramatically.

This paper examines the interactions between market structure and resource allocation over time when there is endogenous technical progress. The structures considered are a planned economy, pure monopoly, and competition with patent rights. In an efficient allocation the date of invention coincides with the date of innovation (the date at which technology is used). This is also true with a pure monopoly, but monopoly retards technical progress relative to the efficient level. Competition for patents rights to a new technology results in excessively rapid technical progress if the resource endowment of the economy is sufficiently large. Also, competition may lead to “sleeping patents” where invention strictly precedes the date of innovation.