IDEAS home Printed from
   My bibliography  Save this paper

Rational Expectation Can Preclude Trades


  • Matsuhisa, Takashi
  • Ishikawa, Ryuichiro


We consider a pure exchange economy under uncertainty in which the traders have the non-partition structure of information. They willing to trade the amounts of state-contingent commodities and they know their own expectations. Common knowledge of these conditions among all the traders can preclude trade if the initial endowments allocation is ex-ante Pareto optimal. Furthermore we introduce rational expectations equilibrium under the non-partition information, and prove the existence theorem and the fundamental theorems of welfare economics.

Suggested Citation

  • Matsuhisa, Takashi & Ishikawa, Ryuichiro, 2003. "Rational Expectation Can Preclude Trades," Discussion Papers 2002-01, Graduate School of Economics, Hitotsubashi University.
  • Handle: RePEc:hit:econdp:2002-01
    Note: April, 2002; Revised: November, 2003

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    Economy with knowledge; Rational expectations equilibrium; No trade theorem; Ex-ante Pareto optimum; Common-knowledge;

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hit:econdp:2002-01. 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: (Digital Resources Section, Hitotsubashi University Library). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.