A social welfare function characterizing competitive equilibria of incomplete financial markets
A classic characterization of competitive equilibria views them as feasible allocations maximizing a weighted sum of utilities. It has been applied to establish fundamental properties of the equilibrium notion, such as existence, determinacy, and computability. However, it fails for economies with missing financial markets. We give such a characterization for economies with missing financial markets, by an amended social welfare function. Its parameters capture both the relative importance of households’ welfare–the classic weights–as well as the disagreements among them as to the value of the missing markets. As a by-product, we identify the dimension of the set of interior equilibrium allocations.
|Date of creation:||May 2008|
|Contact details of provider:|| Postal: Via Silvio d'Amico 77, - 00145 Rome Italy|
Phone: +39 06 57114612
Fax: +39 06 57114771
Web page: http://host.uniroma3.it/dipartimenti/economia/it/
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.:
- Mario Tirelli, 2008.
"Constrained inefficiency in GEI: a geometric argument,"
Departmental Working Papers of Economics - University 'Roma Tre'
0086, Department of Economics - University Roma Tre.
- Tirelli, Mario, 2008. "Constrained inefficiency in GEI: A geometric argument," Journal of Mathematical Economics, Elsevier, vol. 44(11), pages 1197-1214, December.
- Timothy J Kehoe & David K Levine, 1985.
"Comparative Statics and Perfect Foresight in Infinite Horizon Economies,"
Levine's Working Paper Archive
1873, David K. Levine.
- Kehoe, Timothy J & Levine, David K, 1985. "Comparative Statics and Perfect Foresight in Infinite Horizon Economies," Econometrica, Econometric Society, vol. 53(2), pages 433-453, March.
- T. J. Kehoe & D. K. Levine, 1982. "Comparative Statics and Perfect Foresight in Infinite Horizon Economies," Working papers 312, Massachusetts Institute of Technology (MIT), Department of Economics.
- Timothy J. Kehoe & David K. Levine, 1982. "Comparitive Statics and Perfect Foresight in Infinite Horizon Economies," UCLA Economics Working Papers 259, UCLA Department of Economics.
- DEBREU, Gérard, "undated".
CORE Discussion Papers RP
132, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Mantel, Rolf R, 1971. "The Welfare Adjustment Process: Its Stability Properties," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 12(3), pages 415-430, October.
- Siconolfi, P & Villanacci, A, 1991. "Real Indeterminacy in Incomplete Financial Market Economies without Aggregate Risk," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 1(3), pages 265-276, July.
- Magill, Michael & Shafer, Wayne, 1991. "Incomplete markets," Handbook of Mathematical Economics, in: W. Hildenbrand & H. Sonnenschein (ed.), Handbook of Mathematical Economics, edition 1, volume 4, chapter 30, pages 1523-1614 Elsevier.
- Debreu, Gerard, 1976. "Smooth Preferences: A Corrigendum," Econometrica, Econometric Society, vol. 44(4), pages 831-832, July.
- Atsushi Kajii & Antonio Villanacci & Alessandro Citanna, 1998.
"Constrained suboptimality in incomplete markets: a general approach and two applications,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(3), pages 495-521.
- Alessandro Citanna & Atsushi Kajii & Antonio Villanacci, 1998. "Constrained suboptimality in incomplete markets: a general approach and two applications," Post-Print hal-00479390, HAL.
- Joseph E. Stiglitz, 1982. "The Inefficiency of the Stock Market Equilibrium," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 241-261.
- Radner, Roy, 1972. "Existence of Equilibrium of Plans, Prices, and Price Expectations in a Sequence of Markets," Econometrica, Econometric Society, vol. 40(2), pages 289-303, March.
When requesting a correction, please mention this item's handle: RePEc:rtr:wpaper:0093. 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: (Telephone for information)
If references are entirely missing, you can add them using this form.