Interim efficiency with MEU-preferences

V. Filipe Martins-da-Rocha

Journal of Economic Theory, 2010, vol. 145, issue 5, 1987-2017

Abstract: Recently Kajii and Ui (2009) [17] 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 (2009) [17] 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) [24].

Keywords: Interim; efficiency; Multiple; priors; and; posteriors; MaxMin; expected; utility; No-trade; Common; knowledge (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (8)

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Working Paper: Interim efficiency with MEU-preferences (2010)
Working Paper: Interim efficiency with MEU-preferences (2009)
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