Time, Uncertainty and Incomplete Markets

Antonio Villanacci, Laura Carosi, Pierluigi Benevieri and Andrea Battinelli
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Antonio Villanacci: Università degli Studi di Firenze
Laura Carosi: Università degli Studi di Pisa
Pierluigi Benevieri: Università degli Studi di Firenze
Andrea Battinelli: Università degli Studi di Siena

Chapter Chapter 10 in Differential Topology and General Equilibrium with Complete and Incomplete Markets, 2002, pp 289-305 from Springer

Abstract: Abstract In this chapter, we discuss the model of an exchange economy presented in Chapter 8 without Assumption c3, i.e., we introduce time and uncertainty. In Section 1, we present that more general framework keeping Assumption h5 — market completeness, and we discuss the need for its removal and the introduction of a financial side of the economy. In Section 2, we formalize a way of introducing financial assets, define the notion of complete financial markets and study the relationship with complete markets. Finally, the definition of incomplete financial markets is given and the main fundamental results, which are going to be shown in the following chapters, are summarized.

Keywords: Financial Market; Financial Asset; Return Matrix; Price Vector; Incomplete Market (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-1-4757-3619-9_10

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DOI: 10.1007/978-1-4757-3619-9_10

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