# Self-fulfilling equilibria: an existence theorem for a general state space

Article Abstract:

A two-period incomplete market economy with a finite number of assets and general state spaces is shown to have an equilibrium under a weak regularity. It is assumed that for any possible asset allocation almost every non-atomic state has a regular spot equilibrium. Since the assumption is weak, it enables the creation of self-fulfilled price expectations functions dependent on asset allocations. Its main characteristic is that for almost every non-atomic state spot prices are continuous on asset trades.

Publication Name: The Journal of Mathematical Economics

Subject: Mathematics

ISSN: 0304-4068

Year: 1996

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# Arbitrage, equilibrium, and gains from trade: a counterexample

Article Abstract:

A counterexample to a theorem that states that limited arbitrage is needed and adequate to attain equilibrium in an economy with unbounded short sales is presented. The counterexample indicates that the concept defined by the theorem is not enough for attaining equilibrium and shows that the notion of gains from trade has no significance for the existence of an equilibrium.

Publication Name: The Journal of Mathematical Economics

Subject: Mathematics

ISSN: 0304-4068

Year: 1997

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