This paper examines the properties of a market solution to the output uncertainty problem faced by unincorporated primary producers. An insurance contract is formulated and shown to provide income insurance to producers without exposing insurers to moral hazard. The equilibrium relative to this contract is shown to be equivalent to that effected by a stock market available to all producers.
Arzac, Enrique. "Income Insurance with Uncertain Output." International Economic Review 30, no. 3 (August 1989): 561-69.
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