A price mechanism in economies with asymmetric information
In this paper we consider a pure exchange economy with a finite set of types of agents which have incomplete and asymmetric information on the states of nature. Our aim is to describe the equilibrium price formation and how the lack of information may affect the allocation of resources. For it, we adapt to an asymmetric information scenario a variant of the Shapley-Shubik game introduced by Dubey and Geanakoplos (2003).
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- Dubey, Pradeep & Geanakoplos, John, 2003.
"From Nash to Walras via Shapley-Shubik,"
Journal of Mathematical Economics,
Elsevier, vol. 39(5-6), pages 391-400, July.
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- Pradeep Dubey & John Geanakoplos, 2002. "From Nash to Walras via Shapley-Shubik," Cowles Foundation Discussion Papers 1360, Cowles Foundation for Research in Economics, Yale University.
- Marta Faias & Emma Moreno-García, 2010. "Incomplete financial markets and differential information," Economic Theory, Springer, vol. 43(2), pages 189-206, May.
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- Radner, Roy, 1979. "Rational Expectations Equilibrium: Generic Existence and the Information Revealed by Prices," Econometrica, Econometric Society, vol. 47(3), pages 655-78, May.
- Dionysius Glycopantis & Allan Muir & Nicholas C. Yannelis, 2003. "On extensive form implementation of contracts in differential information economies," Economic Theory, Springer, vol. 21(2), pages 495-526, 03.
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