On aggregation and representative agent equilibria

Robert Jarrow () and Martin Larsson

Journal of Mathematical Economics, 2018, vol. 74, issue C, 119-127

Abstract: Aggregation is an often used tool in finance and macroeconomics, whereby economic equilibrium in a heterogeneous trader economy is characterized by means of the first order optimality conditions of a representative agent. In this paper we study the conditions under which a representative agent exists, and investigate the implications for the existence of equilibrium. The approach applies to markets which are incomplete, including markets with trading constraints, heterogeneous beliefs, and differential information.

Keywords: Representative agent; Aggregation; Radner equilibrium (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:74:y:2018:i:c:p:119-127

DOI: 10.1016/j.jmateco.2017.11.006

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