This Paper studies a general equilibrium economy in which agents have the ability to invest in a risky technology. The investment risk cannot be fully insured with optimal contracts because shocks are private information. We show that the presence of investment risks leads to under-accumulation...

In a multiple-good risk-sharing environment with ex post private information, conditions are found under which collateralized debt is the optimal contract. The necessary and sufficient condition is that the borrower values the collateral good more highly than does the lender; otherwise the...

We study a cost allocation problem under asymmetric information, and show that the ex ante incentive compatible core is non-empty. We also obtain a non-emptiness result for the incentive compatible coarse core, which is one concept of an interim core.

We analyze the ex ante incentive compatible core for replicated private information economies. We show that any allocation in the core when the economy is replicated sufficiently often is approximately Walrasian for the associated Arrow-Debreu economy.

In a differential information economy with quasi-linear utilities, monetary transfers facilitate the fulfillment of incentive compatibility constraints: the associated ex ante core is generically non-empty. However, we exhibit a wellbehaved exchange economy in which this core is empty, even if...

This paper analyzes the non-dichotomy nature of the entry and the price regulations under asymmetric information. When current market is a monopoly and there is a potential entrant, the government should make decisions both on the monopoly (price) regulation and on the entry regulation...