Rational Expectations Equilibrium in Economies with Uncertain Delivery

Joao Correia-da-Silva and Carlos Hervés-Beloso

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: In economies with uncertain delivery, objects of choice are lists of bundles instead of bundles. Agents trade their endowments for lists, and it is the market that selects one of the bundles in the list for actual delivery. Knowledge of the selection mechanism allows agents to predict the bundle that is to be selected in each state of nature. A small but informed agent is introduced in the economy in order to guarantee existence of a rational expectations equilibrium.

Keywords: General equilibrium; Private information; Uncertain delivery; Rationalexpectations; Options; Default. (search for similar items in EconPapers)
JEL-codes: C62 D51 D82 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2006-03
New Economics Papers: this item is included in nep-fmk and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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