Sequentially complete markets remain incomplete

We reconsider the well-known result of Arrow (1953) that the set of equilibria of an economy with complete markets coincides with the one of an economy with sequentially complete markets. We show by means of two examples that this result is problematic when there exist multiple equilibrium continuations to the initial-period component of an intertemporal equilibrium. Some consequences are drawn.

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Year of publication:	2003-11
Authors:	DRÈZE, Jacques ; HERINGS, Jean-Jacques
Institutions:	Center for Operations Research and Econometrics (CORE), École des Sciences Économiques de Louvain
Subject:	sequentially complete markets \| rational expectations \| time inconsistency

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Extent:	application/pdf
Series:	CORE Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE) Number 2003085
Classification:	D52 - Incomplete Markets ; D61 - Allocative Efficiency; Cost-Benefit Analysis
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005042787