 General equilibrium and endogenous creation of asset marketsNova SBE Working Paper Series from Universidade Nova de Lisboa, Nova School of Business and Economics Abstract: This paper studies a class of general equilibrium economies in which asset markets arise as choice of /nancial intermediaries. The economy is modeled as a two stage game as in Bisin[8]. In the /rst stage intermediaries set up the /nancial structure according to the expectation that they have for the sec- ond stage outcome. In the second stage, consumers behave as price takers in the commodity market and in the previously created assets market. We consider that intermediaries form their expectations using continuous random selections from the second stage equilibrium correspondence (di.erently from Bisin [8] where an endogenous beliefs expectation was used). We establish the existence of equilibria in mixed strategies and moreover, we obtain an approximate equilibria in pure strategies by modeling explicitly the incomplete information that each intermediary has about others intermediaries /xed cost functions. Keywords: Endogenous asset creation; asset design game; strategic intermediaries; continuous random selections; puri/cation of equilibria (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:unl:unlfep:wp454 Access Statistics for this paper More papers in Nova SBE Working Paper Series from Universidade Nova de Lisboa, Nova School of Business and Economics Contact information at EDIRC. |
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