Rational Expectation Can Preclude Trades
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.
|Date of creation:||Nov 2003|
|Note:||April, 2002; Revised: November, 2003|
|Contact details of provider:|| Phone: +81-42-580-8000|
Web page: http://www.econ.hit-u.ac.jp/
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