publication . Article . 1998

On the uniqueness of fully informative rational expectations equilibria

Peter DeMarzo; Costis Skiadas;
Open Access
  • Published: 04 Dec 1998
Abstract
This paper analyzes two equivalent equilibrium notions under asymmetric information: risk neutral rational expectations equilibria (rn-REE), and common knowledge equilibria. We show that the set of fully informative rn-REE is a singleton, and we provide necessary and sufficient conditions for the existence of partially informative rn-REE. In a companion paper (DeMarzo and Skiadas (1996)) we show that equilibrium prices for the larger class of quasi-complete economies can be characterized as rn-REE. Examples of quasi-complete economies include the type of economies for which demand aggregation in the sense of Gorman is possible (with or without asymmetric informa...
Subjects
free text keywords: jel:D82, jel:D84, jel:G12
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