We propose an objective for the firm in a general model of production economies extending over time under uncertainty and with incomplete markets. Trading in commodities and shares of stock occurs sequentially on spot markets at all date-events. We derive the objective of the firm from the...

In a simplified version of the <link rid="b6">Stiglitz and Weiss (1981)</link> model of the credit market we characterize optimal policies to correct market failures. Widely applied policies, notably interest-rate subsidies and investment subsidies, are compared to the theoretical optimum. Copyright © 2009 Wiley...

In a game with rational expectations individuals refine their information with the information revealed by the strategies of other individuals: their elementary acts of other individuals at each state of the world. At a Nash of a game with rational expectations, the information of individuals is...

In a simple model of the credit market, based on Stiglitz-Weiss (1981), equilibria are computed and optimal policies to correct market failures are characterized. Some widely applied policies, notably interest-rate subsidies and investment subsidies, are compared to theoretical optimum, and an...