We show that in large symmetric auctions with conditionally i.i.d. common values and CARA preferences, the second-price auction raises more revenue than the …rst-price auction. We also show by an example that the ranking does not extend to general symmetric risk-averse preferences.

This paper presents a theoretical and empirical analysis of the impact of financial assistance to farms on crop biodiversity in an uncertain setting. The findings reveal that risk aversion is an important driving force for crop biodiversity conservation. Riskaverse farmers can hedge against the uncertainty they face by allocating land to different crop species. However, policies intended to sta...

We show that the production of information in financial markets is limited by the extent of risk sharing. The wider a stock’s investor base, the smaller the risk borne by each shareholder and the less valuable information. A firm which expands its investor base without raising capital affects its information environment through three channels: (i) it induces incumbent shareholders to reduce the...

This chapter considers the natural hazard Risk Manager as an agent for choosing between interventions that affect the impact of future hazards. As such, it is possible to proceed broadly quantitatively, and to set aside the many less-quantifiable concerns that arise during a period of real-time hazard management. Thus the aim is to describe a framework in which it is possible to address questio...

Fuel hedging is a common risk management tool used in the airline industry. But past studies have not addressed the question of whether fuel hedging creates any benefit to airline operations. This study is the first work that empirically examines the role of fuel hedging in reducing airlines’ operating costs. Using US airlines data from 2000 through 2012, we find that, after accounting for the ...

It is well-known that pension fund participants can benefit from intergenerational risksharing, but that different generations have different incentives. This paper models intergenerational solidarity in closing funded pension plans as a bargaining process between generations. We consider generations which each are represented by members of the pension fund’s board. We model pension funds that ...