Journal article
An equivalence theorem for a differential information economy
Journal of mathematical economics, Vol.41(7), pp.844-856
11/01/2005
DOI: 10.1016/j.jmateco.2004.01.004
Abstract
In a pure exchange economy with differential information and a finite set of traders, physical commodities and states of nature, we characterize the Walrasian expectations or Radner equilibria by using the veto power of the grand coalition. We prove that an allocation
x is a Radner equilibrium allocation if and only if it is “privately non-dominated” by the grand coalition in every economy obtained by perturbing the original initial endowments in the direction of
x. The first and second welfare theorems become particular cases of our main result. Since the deterministic Arrow–Debreu–McKenzie model is a special case of the differential information economy model we also provide a new characterization of the Walrasian equilibria.
Details
- Title: Subtitle
- An equivalence theorem for a differential information economy
- Creators
- Carlos Hervés-Beloso - Universidade de VigoEmma Moreno-García - Universidad de SalamancaNicholas C. Yannelis - University of Illinois Urbana-Champaign
- Resource Type
- Journal article
- Publication Details
- Journal of mathematical economics, Vol.41(7), pp.844-856
- Publisher
- Elsevier B.V
- DOI
- 10.1016/j.jmateco.2004.01.004
- ISSN
- 0304-4068
- eISSN
- 1873-1538
- Language
- English
- Date published
- 11/01/2005
- Academic Unit
- Economics
- Record Identifier
- 9984380492302771
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