Lotteries, sunspots, and incentive constraints.
We study a prototypical class of exchange economies with private information and indivisibilities. We establish an equivalence between lottery equilibria and sunspot equilibria and show that the welfare and existence theorems hold. To establish these results, we introduce the concept of the stand-in...
| Publicado en: | Journal of Economic Theory Vol. 107; no. 1; pp. 39 - 70 |
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| Autores principales: | , , |
| Formato: | Artículo |
| Publicado: |
Academic Press Inc.
November 2002
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=513156780&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 513156780 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00220531 RTH jtl: Journal of Economic Theory issn: 00220531 maglogo: N pubinfo: dt: November 2002 vid: 107 iid: 1 pid: 735 pub: Academic Press Inc. artinfo: ui: 513156780 10.1006/jeth.2001.2792 ppf: 39 ppct: 31 formats: tig: atl: Lotteries, sunspots, and incentive constraints. aug: au: Kehoe, Timothy J. Levine, David K. Prescott, Edward C. su: Sunspots (Economics) Resource allocation -- Mathematical models sug: subj: Sunspots (Economics) Resource allocation -- Mathematical models ab: We study a prototypical class of exchange economies with private information and indivisibilities. We establish an equivalence between lottery equilibria and sunspot equilibria and show that the welfare and existence theorems hold. To establish these results, we introduce the concept of the stand-in consumer economy, which is a standard, convex, finite consumer, finite good, pure exchange economy. With decreasing absolute risk aversion and no indivisibilities, we prove that no lotteries are actually used in equilibrium. We provide a simple numerical example with increasing absolute risk aversion in which lotteries are necessarily used in equilibrium. We also show how the equilibrium allocation in this example can be implemented in a sunspot equilibrium. Journal of Economic Literature Classification Numbers: D11, D50, D82.|Sc 2002 Elsevier Science (USA) pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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