Title
General Competitive Analysis in an Economy with Private Information
Publisher
Center for Economic Research, Department of Economics, University of Minnesota
Abstract
General competitive analysis is extended to cover a dynamic, pure-exchange
economy with privately observed shocks to preferences. In
the linear, infinite-dimensional space containing lotteries we establish
the existence of optima, the existence of competitive equilibria,
that every competitive equilibrium is an optimum, and, with some
revealing qualifications, that every optimum can be supported as a
competitive equilibrium. An example illustrates that rationing and
securities with contrived risk have an equilibrium interpretation.
Previously Published Citation
Townsend, R.M. and Prescott, E.C., (1981), "General Competitive Analysis in an Economy with Private Information", Discussion Paper No. 144, Center for Economic Research, Department of Economics, University of Minnesota.
Suggested Citation
Townsend, Robert M.; Prescott, Edward C..
(1981).
General Competitive Analysis in an Economy with Private Information.
Center for Economic Research, Department of Economics, University of Minnesota.
Retrieved from the University of Minnesota Digital Conservancy,
http://hdl.handle.net/11299/55080.