ISSN:
1467-6435
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Sociology
,
Economics
Notes:
The paper analyzes risk allocation in large-scale resource ventures. High set-up costs, a long gestation period of ten years and more and a high financial risk are characteristics for large-scale resource ventures. Financial risk is the result of economic risk (price risk, cost risk), technological risk (innovation in extraction, exploration) and political risk (taxation schemes, extraction rights). Large-scale resource ventures represent an interesting case of risk allocation in which many players are involved. Institutional arrangements for risk allocation in large-scale resource ventures are interpreted as a complex net of contractual relationships between different players. The paper analyzes a theoretical framework in which risk allocation is studied. Policies of risk shifting for the individual agent and institutional arrangements for risk shifting in the case of large-scale resource ventures are studied. The net of relations between different players is a check on the strategic behavior arising from idiosyncratic problems and thus reduces contract risk.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/j.1467-6435.1987.tb00785.x
