Notes on the Suboptimality Result by J. D. Geanakoplos and H. M. Polemarchakis (1986)
J. D. Geanakoplos and H. M. Polemarchakis (1986) prove the generic constrained suboptimality of equilibrium allocations in two period economies with incomplete markets. They perturb asset prices at equilibrium when the degree of market incompleteness equals one. However, since prices are not fundamentals that parameterize the economy, a generic result cannot be obtained in such a way. In these notes we provide complete and detailed version of their proof in which the arguments do not depend on the dimension of the market incompleteness and in which utilities and endowments are perturbed.
|Date of creation:||Jul 2002|
|Date of revision:||Dec 2005|
|Publication status:||Published in Estudios Economicos|
|Contact details of provider:|| Postal: UCEA-Campus Marfil, Fracc. I, El Establo, Guanajuato GTO 36250|
Phone: [+52 473] 735 2925 x-2925
Fax: [+52 473] 735 2925 x-2925
Web page: http://economia.ugto.org/
More information through EDIRC
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.:
- Alessandro Citanna & Atsushi Kajii & Antonio Villanacci, 1998.
"Constrained suboptimality in incomplete markets: a general approach and two applications,"
- Atsushi Kajii & Antonio Villanacci & Alessandro Citanna, 1998. "Constrained suboptimality in incomplete markets: a general approach and two applications," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(3), pages 495-521.
- Joseph E. Stiglitz, 1982. "The Inefficiency of the Stock Market Equilibrium," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 241-261.
- Newbery, David M G & Stiglitz, Joseph E, 1982. "The Choice of Techniques and the Optimality of Market Equilibrium with Rational Expectations," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 223-246, April.
When requesting a correction, please mention this item's handle: RePEc:gua:wpaper:ec200507. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Luis Sanchez Mier)
If references are entirely missing, you can add them using this form.