Journal of Political Economy Vol. 84 No. 1 1976
Sharing Risks of Deferred Payment
Abstract
Because uncertainty often enters into economic transactions when payment is deferred, it may be advantageous to make the amount of payment depend on the occurrence of uncertain events. This general method of accomplishing risk-sharing is studied and its relevance is discussed in two cases: (1) uncertainty over the rate of inflation and cost-of-living escalators; (2) uncertainty over the exchange rate and foreign currency payment plans.
- DOI
- 10.1086/260418
- Volume
- 84
- Issue
- 1
- Pages
- 161-168
- Language
- en
- Sources
- openalex crossref