Economies with asymmetric information are encompassed by an extension of the model of general competitive equilibrium that does not require an explicit modeling of private information. Sellers have discretion over deliveries on contracts; this is in common with economies with default, incomplete...

Markets are incomplete when the assets available to the agents do not span the space of future contingencies. Efficiency is then assessed by the weak criterion of "constrained efficiency" (efficiency relative to the set of allocations compatible with the asset structure). That criterion requires...

We study competitive equilibrium in sequential economies under limited commitment. Default induces permanent exclusion from financial markets and endogenously determined solvency constraints prevent debt repudiation. Our analysis shows that such an enforcement mechanism is essentially fragile,...

Static competitive equilibria in economies with incomplete markets are generically constrained suboptimal. Allocations induced by strategic equilibria of imperfectly competitive markets are also generically inefficient. In both cases, there is scope for Pareto-improving amendments. Considering...

In this paper we generalize Magill and Shafer (1990) analysis of generically complete markets in the presence of open ended horizon. Doing this we are faced with difficulties specific to the presence of infinitely many periods. Until now these difficulties did not allow any satisfactory...

This paper analyzes how insurance companies allow the issue of market incompleteness to be overcome. A general equilibrium economy is considered in which heterogeneous agents face endowment risks. Markets are incomplete: there are only markets for trading commodities ex-post and hedging price...

In this paper, I construct a model of an exchange economy in which bankruptcy arises in a manner similar to what we observe. This model is a more realistic representation of some markets in which intertemporal assets are traded. Using standard and natural assumptions, I show that every economy...

Episodes of high inflation are generally accompanied by a shortening of the maturity of nominal debt contracts. This paper develops a multiperiod general equilibrium model with incomplete markets to study the relationship between inflation and the maturity structure of nominal bonds. The model...

Standard macroeconomic theory did not help foresee the crisis, nor has it helped understand it or craft solutions. This columns argues that both the New Classical and New Keynesian complete markets macroeconomic theories not only did not allow the key questions about insolvency and illiquidity...

This article provides a simple account of the effect of quality competition on the extent of sequential entry accommodation for a differentiated oligopoly market characterized by locational differentiation. The model is solved with consumers seeking a “love for quality” surplus utility while...