Non-implementation of Rational Expectations as a Perfect Bayesian Equilibrium

Dionysius Glycopantis, Allan Muir and Nicholas C. Yannelis
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Dionysius Glycopantis: Department of Economics, City University
Allan Muir: Department of Mathematics, City University
Nicholas C. Yannelis: Department of Economics, University of Illinois at Urbana-Champaign

No 148, Economics Series from Institute for Advanced Studies

Abstract: We show that a rational expectations equilibrium need not be incentive compatible, need not be implementable as a perfect Bayesian equilibrium and may not be fully Pareto optimal, unless the utility functions are state independent. A comparison of rational expectations equilibria with core concepts is also provided.

Keywords: Differential information economy; Rational expectations equilibrium; Implementation; Game trees; Private core (search for similar items in EconPapers)
JEL-codes: C71 C72 D5 D82 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2004-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://irihs.ihs.ac.at/id/eprint/1546 First version, 2004 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ihs:ihsesp:148

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