Economics at your fingertips  

Comparing Sunspot Equilibrium and Lottery Equilibrium Allocations: The Finite Case

Rodney Garratt (), Todd Keister () and Karl Shell ()

Working Papers from Cornell University, Center for Analytic Economics

Abstract: Sunspot equilibrium and lottery equilibrium are two stochastic solution concepts for nonstochastic economies. Recent work by Garratt, Keister, Qin, and Shell (in press) and Kehoe, Levine, and Prescott (in press) on nonconvex exchange economies has shown that when the randomizing device is continuous, applying the two concepts to the same fundamental economy yields the same set of equilibrium allocations. In the present paper, we examine economies based on a discrete randomizing device. We extend the lottery model so that it can constrain the randomization possibilities available to agents in the same way that the sunspots model can. Every equilibrium allocation of our generalized lottery model has a corresponding sunspot equilibrium allocation. For almost all discrete randomizing devices, the converse is also true. There are exceptions, however: for some randomizing devices, there exist sunspot equilibrium allocations with no lottery equilibrium counterpart.

Date: 2002-07
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)

Related works:
Journal Article: Comparing Sunspot Equilibrium And Lottery Equilibrium Allocations: The Finite Case (2004) Downloads
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:

Access Statistics for this paper

More papers in Working Papers from Cornell University, Center for Analytic Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().

Page updated 2020-05-25
Handle: RePEc:ecl:corcae:02-07