Risk-Sharing and Retrading in Incomplete Markets
AbstractAt a competitive equilibrium of an incomplete-markets economy agents’ marginal valuations for the tradable assets are equalized ex-ante. We characterize the finest partition of the state space conditional on which this equality holds for any economy. This leads naturally to a necessary and sufficient condition on information that would lead to retrade, if such information were to become publicly available after the initial round of trade.
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Bibliographic InfoPaper provided by European University Institute in its series Economics Working Papers with number ECO2012/03.
Date of creation: 2012
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More information through EDIRC
Competitive Equilibrium; Incomplete Markets; Information; Re-trading;
Other versions of this item:
- D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-21 (All new papers)
- NEP-CTA-2012-03-21 (Contract Theory & Applications)
- NEP-MIC-2012-03-21 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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