# Computing equilibria when asset markets are incomplete

Article Abstract:

The general equilibrium with incomplete asset markets model allows the analysis of important economic phenomena. However, whether equilibrium is attained in incomplete markets remains in question since demand functions are typically not continuous and discontinuities occur at prices for which asset returns become redundant. Allowing an agent to introduce a new asset when such redundancies occur enables equilibrium to be proven using a standard path-following argument. Equilibrium for a numerical example is computed using available algorithms for path-following.

Publication Name: Econometrica

Subject: Mathematics

ISSN: 0012-9682

Year: 1996

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# Testable restrictions on the equilibrium manifold

Article Abstract:

Testable restrictions on finite data sets for the pure trade model are derived. Consistency with the equilibrium behavior of pure trade economy is achieved using a finite system of polynomial inequalities in unobservable variables and market data that are satisfied by market prices, individual income and aggregate endowments observations. Characterizations of the behavior of observations in aggregate endowments and market prices consistent with a Robinson Crusoe economy are also presented.

Publication Name: Econometrica

Subject: Mathematics

ISSN: 0012-9682

Year: 1996

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# A comment on "Learning, Mutation, and Long-Run Equilibria in Games." (response to M. Kandori, G. Mailath and R. Rob, Econometrica, 1993, vol. 61, p.29)

Article Abstract:

A stationary distribution model characterized by Darwinian dynamic conditions is evaluated. The model described cases of strategy distribution in terms of dominant strategy (DS) games, coordination games and games without symmetric pure strategy (NP) equilibrium. Distribution convergence to a symmetric Nash equilibrium as the mutation rate disappears is upheld only for large player populations in DS and NP cases.

Publication Name: Econometrica

Subject: Mathematics

ISSN: 0012-9682

Year: 1996

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