Walrasian foundations for equilibria in segmented markets

Rohit Rahi () and Jean-Pierre Zigrand

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We study a CAPM economy with segmented financial markets and competitive arbitrageurs who link these markets. We show that the equilibrium of the arbitraged economy is Walrasian in the sense that it coincides with the equilibrium of an appropriately defined competitive economy with no arbitrageurs. This characterization serves to clarify the role that arbitrageurs play in integrating markets.

Keywords: segmented markets; arbitrage; restricted participation (search for similar items in EconPapers)
JEL-codes: D52 G10 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2014-06-01
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Citations: View citations in EconPapers (4)

Published in Mathematics and Financial Economics, 1, June, 2014, 8(3), pp. 249 - 264. ISSN: 1862-9679

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Related works:
Working Paper: Walrasian foundations for equilibria in segmented markets (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:55940

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