I develop a noisy rational expectations equilibrium model with a continuum of states and a full set of options that render the market complete. I show a major difference in equilibrium behavior between models with constant absolute risk aversion (CARA) and non-CARA preferences. First, when informed traders have non-CARA preferences, all equilibria are fully revealing, independent of the amount ...

A linear ordering (X,≺) is a Debreu chain (or has the Debreu property) if each subordering (Y,≺) of X can be embedded into X with an injective function that is both order-preserving and continuous with respect to the order topology on X and Y . The most typical example of a Debreu chain is the linearly ordered topological space (R, <, τ<) of real numbers endowed with its usual order < and the o...

THE AIM OF THIS PAPER is to study core convergence in economies with asymmetric information. We will argue that the positive results of Debreu and Scarf (1963) and Aumann (1964) do not extend to a model with incomplete information in which decisions are made at the interim stage.2 Consider first the case in which decisions are made at the ex-ante stage, i.e., before information is revealed to a...

In economies with adverse selection, Arrow-Debreu contingent commodity contracts must satisfy incentive constraints. Following Prescott and Townsend (in Econometrica, 1984), an Arrow-Debreu economy is considered with a continuum of agents whose feasible sets are artificially restricted by imposing these incentive constraints. Equilibria in such an economy must be incentive-constrained Pareto ef...

The Gale–Nikaido–Debreu lemma plays an important role in establishing the existence of competitive equilibrium. In this paper, we use Sperner’s and basic elements topology to prove lemma.

In a recent paper [7], Dutang provided a thorough study of theorems guaranteeing existence of generalized Nash equilibria and analyze the assumptions on practical parametric feasible sets. Motivated by [7], firstly in this paper, we obtain a generalization (Theorem 1) of an equilibrium theorem for a competitive economy due to Arrow and Debreu [1]. Secondly, we show that our previous generalizat...

In this paper, we consider the system of vector quasi-equilibrium problems with or without involving -condensing maps and prove the existence of its solution. Consequently, we get existence results for a solution to the system of vector quasi-variational-like inequalities. We also prove the equivalence between the system of vector quasi-variational-like inequalities and the Debreu type equilibr...

Here we briefly review the general equilibrium theory, which is pretty traditional: preference and the concept of ordinal utility, demand and comparative statics, the definition of Arrow–Debreu equilibrium, Pareto efficiency and welfare theorems, welfare comparison and compensation principle, and incomplete asset markets. As they are standard, they are presented without proofs. For a comprehens...