In a financial economy with asymmetric information and incomplete markets, we study how agents, having no model of how equilibrium prices are determined, may still refine their information by eliminating sequentially "arbitrage state(s)", namely, the state(s) which would grant the agent an...

This paper presents the differential approach to applied demand analysis. The demand systems of this approach are general, having coefficients which are not neces- sarily constant. We consider the Rotterdam parameterization of differential demand systems and derive the absolute and relative...