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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Year of publication:	2000-10
Authors:	Dierker, Egbert ; Dierker, Hildegard ; Grodal, Birgit
Institutions:	Centre for Industrial Economics (CIE), Økonomisk Institut
Subject:	incomplete markets with production \| constraint efficiency \| Drèze equilibria

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Series:	CIE Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Published in: Econometrica. May 2002; 70(3): 1245-51 Number 2000-07 15 pages
Classification:	D21 - Firm Behavior ; D52 - Incomplete Markets ; G1 - General Financial Markets ; L2 - Firm Objectives, Organization, and Behavior
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005749385