Endogenous differential information in financial markets
AbstractWe develop a two period general equilibrium model with incomplete financial markets and differential information. Making endogenous the traditional informational restriction on consumption, we allow agents to obtain information from physical and financial markets. Thus, the investment in financial promises and the trade of commodities in spot markets appear as natural channels to improve the information that an agent has about the realization of future states of nature.
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Bibliographic InfoPaper provided by University of Chile, Department of Economics in its series Working Papers with number wp312.
Length: 18 pages
Date of creation: Jul 2010
Date of revision:
Incomplete Markets; Differential information; Enlightening equilibrium.;
Find related papers by JEL classification:
- D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
- D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-03 (All new papers)
- NEP-CTA-2010-07-03 (Contract Theory & Applications)
- NEP-DGE-2010-07-03 (Dynamic General Equilibrium)
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