Cyber-attacks on financial institutions and financial market infrastructures are becomingmore common and more sophisticated. Risk awareness has been increasing, firms activelymanage cyber risk and invest in cybersecurity, and to some extent transfer and pool theirrisks through cyber liability...

We show that in almost every economy with separable externalities, every competitive equilibrium can be Pareto improved by a package of anonymous commodity taxes that causes prices to adjust and markets to reclear at different levels of individual consumption. This constrained suboptimality of...

We study competitive equilibria with moral hazard in economies with aggregate risk and where trading occurs with an incomplete set of financial assets. The main conclusion of the paper is that, contrary to the individual risk economies, moral hazard is compatible with trading in competitive...

Do Walrasian markets function orderly in the presence of adverse selection? In particular, is their outcome efficient? This paper addresses these questions in the context of a Rothschild and Stiglitz insurance economy. We identify an externality associated with the presence of adverse selection...

Information dissemination and aggregation are key economic functions of financial markets. How intelligent do traders have to be for the complex task of aggregating diverse information (i.e., approximate the predictions of the rational expectations equilibrium) in a competitive double auction...

We show that in almost every economy with separable externalities, every competitive equilibrium can be Pareto improved by a package of anonymous commodity taxes that cause prices to adjust and markets to reclear at different levels of individual consumption. The argument can be extended to...

This paper analyses the properties of (strong) core allocations in a two-period asymmetric information economy that also involves both negligible and non-negligible agents as well as an infinite dimensional commodity space. Within this setup, we allow the consumption set of each agent to be an...

We study core allocations in a two-period asymmetric information mixed economy, where the consumption sets are arbitrary subsets of an ordered Banach space, and the feasibility is defined as exact. We prove that (i) the strong blocking by a generalized coalition leads to a weak blocking by some...

In an article appeared in the Journal of Mathematical Economics, J. Geanakoplos and H. Polemarchakis, [Geanakoplos J. and Polemarchakis H.M.: "Pareto improving taxes", Journal of Mathematical Economics 44 (2008), 682-696], prove on page 685 the following theorem: "Theorem. For almost all...

Attainment of rational expectations equilibria in asset markets calls for the price system to disseminate traders' private information to others. It is known that markets populated by asymmetrically-informed profit-motivated human traders can converge to rational expectations equilibria. This...