Stable Sets for Asymmetric Information Economies

Maria Graziano, Claudia Meo () and Nicholas C. Yannelis ()
Additional contact information
Claudia Meo: Università di Napoli Federico II, http://www.unina.it
Nicholas C. Yannelis: University of Iowa and University of Manchester

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: An exchange economy with asymmetrically informed agents is considered with an exogenous rule that regulates the information sharing among agents. For it, the notion of stable sets à la Von Neumann and Morgenstern is analyzed. Two different frameworks are taken into account as regards preferences: a model without expectations and a model with expected utility. For the first one, it is shown that the set $V$ of all individually rational, Pareto optimal, symmetric allocations is the unique stable set of symmetric allocations. For the second one, an example is presented which shows that the same set $V$ is not externally stable and a weaker result is proved. Finally, the coalitional incentive compatibility of allocations belonging to the unique stable set is provided.

Keywords: sets; asymmetric information; information sharing (search for similar items in EconPapers)
JEL-codes: C71 D51 D82 (search for similar items in EconPapers)
Date: 2013-06-25
New Economics Papers: this item is included in nep-cta, nep-gth and nep-mic
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Related works:
Journal Article: Stable sets for asymmetric information economies (2015)
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