We propose an objective for the firm in a model of production economies extending over time under uncertainty and with incomplete markets. We derive the objective of the firm from the assumption of initial-shareholders efficiency. Each shareholder is assumed to communicate to the firm her...

In a game with rational expectations individuals refine their information with the information revealed by the strategies of other individuals: their elementary acts of other individuals at each state of the world. At a Nash of a game with rational expectations, the information of individuals is...

In a simple model of the credit market, based on Stiglitz-Weiss (1981), equilibria are computed and optimal policies to correct market failures are characterized. Some widely applied policies, notably interest-rate subsidies and investment subsidies, are compared to theoretical optimum, and an...

In an economy with asymmetric information, Rational Expectations Equilibria (REE) need not become asymptotically incentive compatible, even if many independent replicas of the economy are merged together. We identify a sub-class of REE for which this is nevertheless the case. It consists of...

We propose an extension of the standard general equilibrium model with production and incomplete markets to situations in which (i) private investors have limited information on the returns of specific assets, (ii) managers of firms have limited information on the preferences of individual...