EconPapers    
Economics at your fingertips  
 

Sunspots, indeterminacy and Pareto inefficiency in economies with incomplete markets

Tito Pietra

Economic Theory, 2004, vol. 24, issue 3, 687-699

Abstract: We consider two periods economies with both intrinsic and extrinsic uncertainty. Asset markets are incomplete in the certainty economy. If assets are nominal, there are enough commodities and the number of agents is greater than two and smaller than the total number of states of nature “tomorrow” (minus one), then a sunspot-invariant equilibrium is generically Pareto dominated by some sunspot equilibria. When assets are real, and there are enough commodities, if there are sunspot equilibria, there are sunspot equilibria Pareto dominating sunspot-invariant equilibria under the same restriction on the number of agents (and stronger restrictions on the number of commodities). Copyright Springer-Verlag Berlin/Heidelberg 2004

Keywords: Sunspots; Real indeterminacy; Efficiency. (search for similar items in EconPapers)
Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://hdl.handle.net/10.1007/s00199-004-0517-1 (text/html)
Access to full text is restricted to subscribers.

Related works:
Chapter: Sunspots, Indeterminacy and Pareto Inefficiency in Economies With Incomplete Markets (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:24:y:2004:i:3:p:687-699

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

DOI: 10.1007/s00199-004-0517-1

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-22
Handle: RePEc:spr:joecth:v:24:y:2004:i:3:p:687-699