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Generic inefficiency of stock market equilibrium when markets are incomplete

Author

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  • GEANAKOPLOS, J.
  • MAGILL, M.
  • QUINZII, M.
  • DREZE, J.

Abstract

A stock market is a mechanism by which the ownership and control of firms is determined through the trading of securities. It is on this market that many of the major risks faced by society are shared through the exchange of securities and the production decisions that influence the present and future supply of resources are determined. If the overall structure of markets is incomplete can the stock market be expected to perform its role of exchanging risks and allocating investment efficiently? It is this question that we seek to answer.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Geanakoplos, J. & Magill, M. & Quinzii, M. & Dreze, J., 1990. "Generic inefficiency of stock market equilibrium when markets are incomplete," LIDAM Reprints CORE 916, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:916
    DOI: 10.1016/0304-4068(90)90039-C
    Note: In : Journal of Mathematical Economics, 19, 113-151, 1990
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    References listed on IDEAS

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    1. Joseph E. Stiglitz, 1982. "The Inefficiency of the Stock Market Equilibrium," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 241-261.
    2. Peter Diamond, 1980. "Efficiency with Uncertain Supply," Review of Economic Studies, Oxford University Press, vol. 47(4), pages 645-651.
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