The argument for the generic existence of competitive equilibria when the asset market is incomplete can be formulated with symmetric treatment of all individuals. The argument extends to a large economy.

We analyze the Pareto optimal contracts between lenders and borrowers in a model with asymmetric information. The model generalizes the Rothschild-Stiglitz pure adverse selection problem by including moral hazard. Entrepreneurs with unequal “abilities” borrow to finance alternative...

We investigate the relation between lotteries and sunspot allocations in a dynamic economy where the utility functions are not concave. In an intertemporal competitive economy, the household consumption set is identified with the set of lotteries, while in the intertemporal sunspot economy it is...

In a game with rational expectations, individuals simultaneously refine their information with the information revealed by the strategies of other individuals. At a Nash equilibrium of a game with rational expectations, the information of individuals is essentially symmetric: the same profile of...