The No Trade Principle in General Environments ∗
نویسندگان
چکیده
The no trade principle asserts that risk-neutral agents are not prepared to trade if and only if a common prior exists. The purpose of this article is to provide general versions of this duality principle. We argue from a strategic viewpoint that completely regularity is the most general and natural topological assumption that we should make on the state space. We consider two cases. In the first case, prior beliefs are regular probability measures with compact supports and bets are continuous functions, while in the second case, prior beliefs are regular probability measures and bets are bounded continuous functions. In each case, we give a necessary and sufficient condition on the (compact) prior set of each agent for the validity of the no trade principle. JEL classification: C70; D82; D84
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