Sunspots, indeterminacy and Pareto inefficiency in economies with incomplete markets

B-Tier
Journal: Economic Theory
Year: 2004
Volume: 24
Issue: 3
Pages: 687-699

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We consider two periods economies with both intrinsic and extrinsic uncertainty. Asset markets are incomplete in the certainty economy. If assets are nominal, there are enough commodities and the number of agents is greater than two and smaller than the total number of states of nature “tomorrow” (minus one), then a sunspot-invariant equilibrium is generically Pareto dominated by some sunspot equilibria. When assets are real, and there are enough commodities, if there are sunspot equilibria, there are sunspot equilibria Pareto dominating sunspot-invariant equilibria under the same restriction on the number of agents (and stronger restrictions on the number of commodities). Copyright Springer-Verlag Berlin/Heidelberg 2004

Technical Details

RePEc Handle
repec:spr:joecth:v:24:y:2004:i:3:p:687-699
Journal Field
Theory
Author Count
1
Added to Database
2026-01-29