Interim efficiency with MEU-preferences

V. Filipe Martins-da-Rocha ()

No 696, Economics Working Papers (Ensaios Economicos da EPGE) from Graduate School of Economics, Getulio Vargas Foundation (Brazil)

Abstract: Recently Kajii and (2008) proposed to characterize interim efficient allocations in an exchange economy under asymmetric information when uncertainty is represented by multiple posteriors.When agents have Bewley's incomplete preferences, Kajii and Ui (2008) proposed a necessary and sufficient condition on the set of posteriors.However, when agents have Gilboa--Schmeidler's MaxMin expected utility preferences, they only propose a sufficient condition.The objective of this paper is to complete Kajii and Ui's work by proposing a necessary and sufficient condition for interim efficiency for various models of ambiguity aversion and in particular MaxMin expected utility.Our proof is based on a direct application of some results proposed by Rigotti, Shannon and Stralecki (2008).

New Economics Papers: this item is included in nep-cta and nep-upt
Date: 2009-07-14
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Persistent link: http://EconPapers.repec.org/RePEc:fgv:epgewp:696

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