EconPapers    
Economics at your fingertips  
 

Walrasian Non-tatonnement with Incomplete and Imperfectly Competitive Markets

Gaël Giraud

Post-Print from HAL

Abstract: Static competitive equilibria in economies with incomplete markets are generically constrained suboptimal. Allocations induced by strategic equilibria of imperfectly competitive markets are also generically inefficient. In both cases, there is scope for Pareto-improving amendments. In an extension of the limit-price process introduced in Giraud [20] to incomplete markets (with infinitely many uncertain states) populated by finitely many players, we show that these two inefficiency problems can be partially overcome when rephrased in a non-tatonnement process. Traders are myopic and trade financial securities in continuous time by sending limit-orders so as to select a portfolio that maximizes the first-order approximation of their expected indirect utility. We show that financial trade curves exist and converge to some second-best efficient restpoint unless some miscoordination stops the dynamics at some inefficient, but locally unstable point.

Keywords: Incomplet markets; imperfect competition; second-best efficiency; non-tatonnement; concurrence imparfaite; efficience de second rang; Marchés incomplets; non-tâtonnement (search for similar items in EconPapers)
Date: 2007-04
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00155717
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in 2007

Downloads: (external link)
https://shs.hal.science/halshs-00155717/document (application/pdf)

Related works:
Working Paper: Walrasian Non-tatonnement with Incomplete and Imperfectly Competitive Markets (2007) Downloads
Working Paper: Walrasian non-tatonnement with incomplete and imperfectly competitive markets (2007) 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: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00155717

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2024-05-08
Handle: RePEc:hal:journl:halshs-00155717