A Characterization of Robust Sunspot Equilibria
Rodney Garratt () and
Todd Keister ()
University of California at Santa Barbara, Economics Working Paper Series from Department of Economics, UC Santa Barbara
In nonconvex environments, a sunspot equilibrium can sometimes be destroyed by the introduction of new extrinsic information. We provide a simple test for determining whether or not a particular equilibrium survives, or is robust to, all possible re…nements of the state space. We use this test to provide a characterization of the set of robust sunspot-equilibrium allocations of a given economy: it is equivalent to the set of equilibrium allocations of the associated lottery economy.
Keywords: Characterization; Robust; Sunspot; Equilibria (search for similar items in EconPapers)
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Journal Article: A Characterization of Robust Sunspot Equilibria (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:cdl:ucsbec:qt6x37686b
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