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.
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 01, 1976
- Accession Number
- ADA032855
Entities
People
- Steven Shavell
Organizations
- Harvard University