Markets and contracts

A. Bisin; J. D. Geanakoplos; P. Gottardi; E. Minelli; H. Polemarchakis

doi:10.1016/j.jmateco.2010.12.017

Markets and contracts

A. Bisin, J. D. Geanakoplos, P. Gottardi, E. Minelli, H. Polemarchakis

Research output: Contribution to journal › Article › peer-review

Abstract

Economies with asymmetric information are encompassed by an extension of the model of general competitive equilibrium that does not require an explicit modeling of private information. Sellers have discretion over deliveries on contracts; this is in common with economies with default, incomplete contracts or price rigidities. Competitive equilibria exist and anonymous markets are viable. But, for a generic economy, competitive equilibrium allocations are constrained suboptimal: there exist Pareto improving interventions via linear, anonymous taxes.

Original language	English (US)
Pages (from-to)	279-288
Number of pages	10
Journal	Journal of Mathematical Economics
Volume	47
Issue number	3
DOIs	https://doi.org/10.1016/j.jmateco.2010.12.017
State	Published - May 2011

Keywords

Asymmetric information
Competitive markets
Equilibrium

ASJC Scopus subject areas

Economics and Econometrics
Applied Mathematics

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10.1016/j.jmateco.2010.12.017

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title = "Markets and contracts",

abstract = "Economies with asymmetric information are encompassed by an extension of the model of general competitive equilibrium that does not require an explicit modeling of private information. Sellers have discretion over deliveries on contracts; this is in common with economies with default, incomplete contracts or price rigidities. Competitive equilibria exist and anonymous markets are viable. But, for a generic economy, competitive equilibrium allocations are constrained suboptimal: there exist Pareto improving interventions via linear, anonymous taxes.",

keywords = "Asymmetric information, Competitive markets, Equilibrium",

author = "A. Bisin and Geanakoplos, {J. D.} and P. Gottardi and E. Minelli and H. Polemarchakis",

note = "Funding Information: We wish to thank Laura Carosi, Tito Pietra and two referees. Bisin acknowledges financial support from NSF grant SES-9818844. ",

year = "2011",

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doi = "10.1016/j.jmateco.2010.12.017",

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T1 - Markets and contracts

AU - Bisin, A.

AU - Geanakoplos, J. D.

AU - Gottardi, P.

AU - Minelli, E.

AU - Polemarchakis, H.

N1 - Funding Information: We wish to thank Laura Carosi, Tito Pietra and two referees. Bisin acknowledges financial support from NSF grant SES-9818844.

PY - 2011/5

Y1 - 2011/5

N2 - Economies with asymmetric information are encompassed by an extension of the model of general competitive equilibrium that does not require an explicit modeling of private information. Sellers have discretion over deliveries on contracts; this is in common with economies with default, incomplete contracts or price rigidities. Competitive equilibria exist and anonymous markets are viable. But, for a generic economy, competitive equilibrium allocations are constrained suboptimal: there exist Pareto improving interventions via linear, anonymous taxes.

AB - Economies with asymmetric information are encompassed by an extension of the model of general competitive equilibrium that does not require an explicit modeling of private information. Sellers have discretion over deliveries on contracts; this is in common with economies with default, incomplete contracts or price rigidities. Competitive equilibria exist and anonymous markets are viable. But, for a generic economy, competitive equilibrium allocations are constrained suboptimal: there exist Pareto improving interventions via linear, anonymous taxes.

KW - Asymmetric information

KW - Competitive markets

KW - Equilibrium

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DO - 10.1016/j.jmateco.2010.12.017

M3 - Article

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VL - 47

SP - 279

EP - 288

JO - Journal of Mathematical Economics

JF - Journal of Mathematical Economics

IS - 3

ER -

Markets and contracts

Abstract

Keywords

ASJC Scopus subject areas

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