Without contracting or repetition, purely self-regarding agents will not trade. To what extent can social preferences, such as altruism or a concern for fairness, generate efficient bilateral exchange? I analyze a simple exchange game: A purely self-regarding first mover transfers some amount of a commodity to a second mover. Then the second mover, who has social preferences defined over materi...

Using the longest dataset publicly available (The Economist’s index of industrial commodity prices), we analyze the behavior of real commodity prices over the period 1862–1999 and have two main findings. First, while there has been a downward trend in real commodity prices of about 1 percent per year over the last 140 years, little support is found for a break in the long-run trend decline in c...

This paper establishes a very general result on the existence of competitive equilibria for exchange economies (with a finite number of agents) with an infinite-dimensional commodity space. The commodity spaces treated are Banach lattices, but no interiority assumptions on the positive cone are made; thus, the commodity spaces covered by this result include most of the spaces considered in econ...

Hedgers located far from organized commodity exchanges suffer a mismatch between their local prices and exchange prices. Futures and options traded on the exchange may still be valuable to distant hedgers, but only to the extent that basis risk is small. Forward contracting allows hedgers to manage risk using a local delivery price, but the Commodity Futures Trading Commission has long banned t...

The main purpose of this paper is to prove the existence of the fuzzy core of an exchange economy with a heterogeneous divisible commodity in which preferences of players are concave measures defined on a σ-algebra of admissible pieces of the total endowment of the commodity. The problem is formulated as the partitioning of a measurable space among finitely many players. Applying the Yosida– He...