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Equilibrium theory with satiable and non-ordered preferences

  • Won, Dong Chul
  • Yannelis, Nicholas C.
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    Abstract This paper investigates the existence of equilibrium in an economy where preferences may be non-ordered and possibly satiable. Remarkably, satiation is allowed to occur only inside the set of feasible and individually rational allocations. One important class of its applications is new developments of asset pricing models where Knightian uncertainty makes preferences incomplete while the absence of a riskless asset makes them satiable. Thus, the result of the paper extends Won et al. (2008) to the case that preferences need be neither complete nor transitive.

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    Article provided by Elsevier in its journal Journal of Mathematical Economics.

    Volume (Year): 47 (2011)
    Issue (Month): 2 (March)
    Pages: 245-250

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    Handle: RePEc:eee:mateco:v:47:y:2011:i:2:p:245-250
    Contact details of provider: Web page: http://www.elsevier.com/locate/jmateco

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    19. H. Henry Cao & Tan Wang & Harold H. Zhang, 2005. "Model Uncertainty, Limited Market Participation, and Asset Prices," Review of Financial Studies, Society for Financial Studies, vol. 18(4), pages 1219-1251.
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