Intertemporal Equilibria with Knightian Uncertainty

We study a dynamic and in nite{dimensional model with Knightian uncertainty modeled by incomplete multiple prior preferences. In in- terior e cient allocations, agents share a common risk{adjusted prior and use the same subjective interest rate. Interior e cient alloca- tions and equilibria coincide with those of economies with subjective expected utility and priors from the agents' multiple prior sets. We show that the set of equilibria with inertia contains the equilibria of the economy with variational preferences anchored at the initial endowments. A case study in an economy without aggregate uncer- tainty shows that risk is fully insured, while uncertainty can remain fully uninsured. Pessimistic agents with Gilboa{Schmeidler's max-min preferences would fully insure risk and uncertainty.