Center for Economic Research, Department of Economics, University of Minnesota
Difficulties in the concept of effective demand in the standard approaches
to the analysis of non-clearing markets have led to considerations of
trading uncertainty or stochastic rationing. In the earlier litterature it
has been shown that under certain conditions the stochastic rationing
mechanism has a linearity property. The purpose of this -paper is to analyze
the existence of an equilibrium with positive trading under a mechanism of
stochastic rationing. Sufficient conditions for this kind of "non-trivial"
equilibrium are developed in a model with overlapping generations and
production. As a by-product it is shown how the theory of continuos
probabilistic expectations, due to Grandmont can be extended to take into
account the possibility of rationing expected in the future.
Honkapohja, S. and Ito, T., (1980), "On Stochastic Rationing Equilibrium", Discussion Paper No. 133, Center for Economic Research, Department of Economics, University of Minnesota.
Honkapohja, Seppo; Ito, Takatoshi.
On Stochastic Rationing Equilibrium.
Center for Economic Research, Department of Economics, University of Minnesota.
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