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Intertemporal efficiency does not imply a common price forecast: a leading example

Author

Listed:
  • Shurojit Chatterji

    (Singapore Management University)

  • Atsushi Kajii

    (Institute of Economic Research, Kyoto University)

  • Huaxia Zeng

    (Shanghai University of Finance and Economics)

Abstract

We define an efficient temporary equilibrium (ETE) within the framework of a two period economy. We show by example that ETE in this setting can lead to intertemporally efficient allocations without the agents forecasts being coordinated on a perfect foresight price. There is a one dimensional set of such efficient allocations for generic endowments.

Suggested Citation

  • Shurojit Chatterji & Atsushi Kajii & Huaxia Zeng, 2018. "Intertemporal efficiency does not imply a common price forecast: a leading example," KIER Working Papers 992, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:992
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    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP992.pdf
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    References listed on IDEAS

    as
    1. Shurojit Chatterji & Sayantan Ghosal, 2012. "Contracting over Prices," Working Papers 36-2012, Singapore Management University, School of Economics.
    2. Grandmont, Jean-Michel, 1993. "Temporary general equilibrium theory," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 4, volume 2, chapter 19, pages 879-922, Elsevier.
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    Cited by:

    1. Chatterji, Shurojit & Kajii, Atsushi, 2023. "Decentralizability of efficient allocations with heterogeneous forecasts," Journal of Economic Theory, Elsevier, vol. 207(C).
    2. Shurojit Chatterji & Atsushi Kajii & Huaxia Zeng, 2018. "Intertemporal effiiency does not imply a common price forecast," KIER Working Papers 999, Kyoto University, Institute of Economic Research.

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    More about this item

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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