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Non-Trivial Equilibrium in an Economy With Stochastic Rationing / Seppo Honkapohja, Takatoshi Ito.
- Format:
- Book
- Author/Creator:
- Honkapohja, Seppo.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w0322.
- NBER working paper series no. w0322
- Language:
- English
- Subjects (All):
- Economics.
- Stochastic analysis.
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1979.
- Cambridge, Massachusetts : National Bureau of Economic Research, 1979.
- Summary:
- Stochastic rationing when the market does not clear draws attention because both Dreze (1975) and Benassy (1975) quantity-constrained equilibria have some undesirable features. Gale (1978)gave the existence proof of trade under uncertainty. His stochastic rationing depends on all the individual effective demands. It is too vague to characterize a rationing mechanism. Moreover, his assumption to ensure a non-trivial equilibrium is economically not clear. In this paper we extend Green (1978) to characterizing the rationing scheme as the individual effective demand times the rationing number which is a function of the aggregate quantity signals. We also construct an economy with money and overlapping generations. We show the existence of the non-trivial equilibrium and provide an example of a non-Wairasian equilibrium at the Walrasian equilibrium prices.
- Notes:
- Print version record
- February 1979.
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