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Roger Guesnerie ()

A chapter in Issues in Contemporary Economics, 1991, pp 115-120 from Palgrave Macmillan

Abstract: Abstract In an Arrow-Debreu equilibrium of a temporal economy, all transactions are decided upon at the outset. However, the allocation of resources thus predicted can obtain as a temporal equilibrium of a sequence of markets (i.e. as an equilibrium of plans prices and price expectations in Radner’s sense) as soon as ‘enough’ markets are open, markets are complete, and agents have perfect foresight. The failure of one of these conditions — completeness, perfect foresight or more loosely rational expectations — would invalidate the sequential dynamical interpretation of the Walras equilibrium and lead us away from the Arrow-Debreu world.

Keywords: Transaction Cost; General Equilibrium; Asymmetric Information; Rational Expectation; Incomplete Market (search for similar items in EconPapers)
Date: 1991
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DOI: 10.1007/978-1-349-11573-0_8

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