6533b826fe1ef96bd1283c7f
RESEARCH PRODUCT
Unawareness and bankruptcy: A general equilibrium model
Aldo RustichiniSalvatore ModicaJ.-marc Tallonsubject
Economics and Econometricsjel:D81General equilibrium theoryjel:D84jel:D5205 social sciencesUnawarenessContext (language use)JEL: D - Microeconomics/D.D8 - Information Knowledge and Uncertainty/D.D8.D81 - Criteria for Decision-Making under Risk and Uncertainty16. Peace & justice[SHS.ECO]Humanities and Social Sciences/Economics and FinanceJEL: D - Microeconomics/D.D8 - Information Knowledge and Uncertainty/D.D8.D84 - Expectations • SpeculationsMicroeconomicsbankruptcyBankruptcyJEL: D - Microeconomics/D.D5 - General Equilibrium and Disequilibrium/D.D5.D52 - Incomplete Markets0502 economics and businessEconomics050206 economic theoryAsset (economics)jel:D4050207 economicsMathematical economicsPublic financeJEL: D - Microeconomics/D.D4 - Market Structure Pricing and Designdescription
International audience; We present a consistent pure-exchange general equilibrium model where agents may not be able to foresee all possible future contingencies. In this context, even with nominal assets and complete asset markets, an equilibrium may not exist without appropriate assumptions. Specific examples are provided. An existence result is proved under the main assumption that there are sufficiently many states that all the agents foresee. An intrinsic feature of the model is bankruptcy, which agents may involuntarily experience in the unforeseen states.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 1998-08-01 |