Dropping rational expectations

We consider a two-period pure-exchange economy, where uncertainty prevails and agents, possibly asymmetrically informed, exchange commodities securities of all kinds. Consumers’ characteristics, anticipations, beliefs actions are private typically not known nor assessed by the other agents. This setting drops rational expectations along ‘common knowledge rationality market clearing’ (CKRMC) assumptions, and, in particular, it Radner (1979) price model inference assumptions. Unaware agents shown to face an incompressible over future states prices, represented so-called ”minimum set”. A sequential equilibrium obtains when expect ‘true’ as possible outcome on every spot market, elect optimal market-clearing strategies. ”correct foresight equilibrium” (CFE) is exist whenever agents’ anticipation sets include minimum set. When CKRMC assumptions restored, CFE lead overarching concept equilibrium, which generalizes classical concepts.