= Periodic utility indifference payment for Gaussian income
{title2=$\overline y=a-\mu\rho b/\sigma-\gamma b^2(1-\rho^2)/2$}
For <Gaussian> income of mean $a$, standard deviation $b$ and tradable <correlation> $\rho$, exponential utility makes the maximum acceptable per-period fee equal to the mean minus the correlated-income hedge cost and the residual <variance> penalty. Compare optimized utilities with and without the contract; a fee above this level makes the contract strictly inferior. At perfect <correlation> the residual penalty vanishes, leaving only the mean and hedge-cost terms.
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