Constrained efficiency without commitment

V. Filipe Martins-da-Rocha and Yiannis Vailakis

Journal of Mathematical Economics, 2015, vol. 61, issue C, 276-286

Abstract: We consider an infinite horizon economy where agents share income risks by trading a complete set of contingent claims but cannot commit to their promises. Allocations are restricted to be self-enforcing relative to autarchic reservation utilities. We provide a general characterization of constrained Pareto efficiency without assuming that there are uniform gains to trade. Our results extend those in Bloise and Reichlin (2011) in several aspects.

Keywords: Limited commitment; Constrained pareto efficiency; High implied interest rates (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:61:y:2015:i:c:p:276-286

DOI: 10.1016/j.jmateco.2015.09.010

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