Trade and Communication Under Subjective Information
This paper models an economy where agents perceive the choices they face subjectively, and have subjective interpretations of the terminology they use in a shared business language. Preferences are defined on what an agent perceives, and not on what is objectively presented to an agent. A business language enables agents to trade, provided the terminology in the language is sufficiently vague: once agents can express more detail than their trading partners can perceive, the language ceases to be useful. Under some regularity conditions on the language, an appropriately defined notion of competitive equilibrium exists. However, much less can be said about welfare than in the neoclassical case, as there are counter-examples to both welfare theorems.
|Date of creation:||03 Mar 2006|
|Date of revision:|
|Contact details of provider:|| Postal: NHH, Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway|
Phone: +47 55 95 92 93
Fax: +47 55 95 96 50
Web page: http://www.nhh.no/en/research-faculty/department-of-business-and-management-science.aspx
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.:
- Modica, Salvatore & Rustichini, Aldo, 1999. "Unawareness and Partitional Information Structures," Games and Economic Behavior, Elsevier, vol. 27(2), pages 265-298, May.
When requesting a correction, please mention this item's handle: RePEc:hhs:nhhfms:2006_002. 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: (Stein Fossen)
If references are entirely missing, you can add them using this form.