Self-fulfilling equilibria: an existence theorem for a general state space

Article Abstract:

A two-period incomplete market economy with a finite number of assets and general state spaces is shown to have an equilibrium under a weak regularity. It is assumed that for any possible asset allocation almost every non-atomic state has a regular spot equilibrium. Since the assumption is weak, it enables the creation of self-fulfilled price expectations functions dependent on asset allocations. Its main characteristic is that for almost every non-atomic state spot prices are continuous on asset trades.

Models, Usage, Markets (Economics), Existence theorems

---

Arbitrage, equilibrium, and gains from trade: a counterexample

Article Abstract:

A counterexample to a theorem that states that limited arbitrage is needed and adequate to attain equilibrium in an economy with unbounded short sales is presented. The counterexample indicates that the concept defined by the theorem is not enough for attaining equilibrium and shows that the notion of gains from trade has no significance for the existence of an equilibrium.

Analysis, Evaluation, Arbitrage

---

Similar abstracts:

• Abstracts: Optimal risk-sharing rules and equilibria with Choquet-expected-utility. Arbitrage, duality and asset equilibria

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.