An imperfectly competitive economy is very prone to market uncertainty, including uncertainty about the liquidity (or "thickness") of markets. The authors show, in particular, that there exist stochastic equilibrium outcomes in nonstochastic market games if (and only if) the endowments are not Pareto optimal. They also provide a link between extrinsic uncertainty arising in games (e.g., correlated equilibria) and extrinsic uncertainty in market economies (e.g., sunspot equilibria). A correlated equilibria to the market game is either a sunspot equilibrium or a nonsunspot equilibrium to the related securities games, but the converse is not true in general. Copyright 1991 by The Review of Economic Studies Limited.
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Volume (Year): 58 (1991) Issue (Month): 5 (October) Pages: 1011-29 Download reference. The following formats are available: HTML
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