We consider a pure exchange economy with private ownership in which consumers have interdependent preferences. Hence, consumers’ preferences are defined on the states of the economy. In a Walras equilibrium for such an economy, it may, of course, be possible for two or more consumers to...

In the present paper we study voting-based corporate control in a general equilibrium model with incomplete financial markets. Since voting takes place in a multi-dimensional setting, super-majority rules are needed to ensure existence of equilibrium. In a linear-quadratic setup we show that the...

We consider an extension of a general equilibrium model with incomplete markets that considers cash-in-advance constraints. The total amount of money is supplied by an authority, which produces at no cost and lends money to agents at short term nominal rates of interest, meeting the demand....

The paper analyzes the process of market selection of investment strategies in an incomplete market of short-lived assets. In the model understudy, asset payoffs depend on exogenous random factors. Market participants use dynamic investment strategies taking account of available information...

This paper considers a standard general equilibrium model with incomplete markets, which is extended to incorporate durable goods and the possibility of default, following Dubey, Geanakpolos and Shubik (1990) and Geanakoplos and Zame (1998). In such a model asset markets will not be active...

We quantify the amount of cross-sectional income and consumption smoothing achieved within subgroups of states, such as regions or clubs, e.g. the club of rich states. We find that there is much income smoothing between as well as within regions. By contrast, consumption smoothing occurs mainly...

An economy with two dates is considered, one state at the first date and a finite number of states at the last date. Shareholders determine production plans by voting — one share, one vote — and at ?-majority stable stock market equilibria, alternative production plans are supported by at...

This paper shows that a stock market is evolutionary stable if and only if stocks are evaluated by expected relative dividends. Any other market can be invaded by portfolio rules that will gain market wealth and hence change the valuation. In the model the valuation of assets is given by the...

We are interested in proving an equilibrium existence result in a general equilibrium model with incomplete nominal asset markets. When we relax the assumption of strict positivity of initial endowments, then, as it is the case for every general equilibrium existence problem, we need to...

In OLG framework, it is generally admitted that PAYG pension system generates a lower capital accumulation, a higher level of interest rate but is more inequality reducing. By taking into account different assets returns and unequal access to them, we find that the PAYG pension system generates...