Core concepts for incomplete market economies

Core Concepts in Economies where Information is Almost Complete

The paper analyzes the properties of cores with differential information, as economies converge to complete information. Two core concepts are investigated: the private core, in which agents’ net trades are measurable with respect to agents’ private information, and the incentive compatible core, in which coalitions of agents are restricted to incentive compatible allocations. ∗We wish to thank...

Axiomatizations of neoclassical concepts for economies

We characterize the Pareto correspondence, the core and the Walras solution using the axioms of consistency, converse consistency and one-person rationality. Consistency and its converse are defined with respect to suitably constructed reduced economies for each case. Our results hold for the well-known class of coalitional production economies, which covers exchange economies as a particular c...

WORKING PAPERS Ownership structure and control in incomplete market economies with transferable utility

We consider an economy with incomplete markets and a single firm and assume that utility can be freely transferred in the form of the initially available good 0 (quasilinearity). In this particularly simple and transparent framework, the objective of a firm can be defined as the maximization of the total utility of its control group C measured in units of good 0. We analyze how the size and the...

Taxation, redistribution, and debt in incomplete market economies with aggregate shocks

We study an incomplete market economy with aggregate shocks and agents with heterogeneous skills. To redistribute and to finance exogenous stochastic government expenditures, the government imposes non-linear taxes on labor income. Only relative assets positions determined, so assets of the government or one of the agents can be set to zero always. Optimal labor distortions are history dependen...

Medicine in free market economies.