Markets and contracts

Alberto Bisin, J.D. Geanakoplos, Piero Gottardi, Enrico Minelli and H. Polemarchakis

Journal of Mathematical Economics, 2011, vol. 47, issue 3, 279-288

Abstract: Economies with asymmetric information are encompassed by an extension of the model of general competitive equilibrium that does not require an explicit modeling of private information. Sellers have discretion over deliveries on contracts; this is in common with economies with default, incomplete contracts or price rigidities. Competitive equilibria exist and anonymous markets are viable. But, for a generic economy, competitive equilibrium allocations are constrained suboptimal: there exist Pareto improving interventions via linear, anonymous taxes.

Keywords: Asymmetric information; Competitive markets; Equilibrium (search for similar items in EconPapers)
JEL-codes: D50 D52 D82 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Working Paper: Markets and contracts (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:47:y:2011:i:3:p:279-288

DOI: 10.1016/j.jmateco.2010.12.017

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