Introduction to Sunspots and Lotteries

This introduces the symposium on sunspots and lotteries. Two stochastic general equilibrium concepts, Sunspot Equilibrium (SE) and Lottery Equilibrium (LE), are compared. It is shown that, for some general, pure-exchange economies which allow for consumption non-convexities or moral hazards, the set of LE allocations is equivalent to the set of SE allocations provided that the randomizing device can generate events of any probability.

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Year of publication:	2002-08
Authors:	Prescott, Edward ; Shell, Karl
Institutions:	Center for Analytic Economics, Department of Economics

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Series:	Working Papers.
Type of publication:	Book / Working Paper
Classification:	D51 - Exchange and Production Economies ; D82 - Asymmetric and Private Information ; D84 - Expectations; Speculations ; E32 - Business Fluctuations; Cycles
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005002335