Nonexistence of Constrained Efficient Equilibria when Markets are Incomplete
We consider economies with incomplete markets, production, an a given distribution of initial endowments. The main purpose of the paper is to present a robust example of an economy with only one firm and one good per state in which no production decision entails a constrained efficient outcome. In particular, the unique Drèze equilibrium is dominated by every other production decision.
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|Date of creation:||Oct 2000|
|Publication status:||Published in: Econometrica. May 2002; 70(3): 1245-51|
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- Egbert Dierker & Hildegard Dierker & Birgit Grodal, 1999.
"Incomplete Markets and the Firm,"
CIE Discussion Papers
1999-05, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
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- Egbert Dierker & Hildegard Dierker & Birgit Grodal, 1999. "Incomplete Markets and the Firm," Discussion Papers 99-03, University of Copenhagen. Department of Economics.
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- Geanakoplos, J. & Magill, M. & Quinzii, M. & Dreze, J., "undated". "Generic inefficiency of stock market equilibrium when markets are incomplete," CORE Discussion Papers RP 916, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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