We revisit a classical theme of general equilibrium theory, namely the continuity of the Walras correspondence. Using a remarkable theorem due to Fort (1951) which has widely been used in recent literature on game theory, we are able to prove the generic continuity of the price equilibrium-set...

We employ laboratory methods to study stability of competitive equilibrium in Scarf's economy (International Economic Review, 1960). Tatonnement theory predicts that prices are globally unstable for this economy, i.e. unless prices start at the competitive equilibrium they oscillate without...

This paper analyzes one-good exchange economies with two infinitely-lived agents and incomplete markets. It is shown that there are no recursive (Markov) equilibria for which borrowing (debt) constraints never bind if the state space of exogenous and endogenous variables is a compact subset of...

Consider an exchange economy with asymmetric information. What is the set of outcomes that are consistent with common knowledge of rationality and market clearing? To address this question we define an epistemic model for the economy that provides a complete description not only of the beliefs...

We employ laboratory methods to study stability of competitive equilibrium in Scarf’s economy (International Economic Review, 1960). Tatonnement theory predicts that prices are globally unstable for this economy, i.e. unless prices start at the competitive equilibrium they oscillate without...

This paper examines the equilibrium correspondence in Arrow-Debreu exchange economies with semi-algebraic preferences. We show that a generic semi-algebraic exchange economy gives rise to a square system of polynomial equations with finitely many solutions. The competitive equilibria form a...

The Lucas (1978) Tree Model lies at the heart of modern macro-finance. At its core, it provides an analysis of the equilibrium price of a long-lived asset in an exchange economy where consumption is the objective, and the sole purpose of the asset is to smooth consumption through time....

The objective of this note is to analyze some implications of the model of commodity money described in Banerjee and Maskin (1996) which may seem paradoxical. In order to do this, we incorporate a general production cost structure into the model. We focus on two different results. First, the...

An economy with a finite number of agents and a finite number of states is considered. An exogenous institutional rule prescribes what moves from one state to another are feasible to each coalition. At each time an agent is called to act with some exogenous probability, and he chooses a...