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General Equilibrium Model with Information Asymmetry and Commodity-Information Technologies

Author

Listed:
  • Ken Urai

    (Graduate School of Economics, Osaka University)

  • Akihiko Yoshimachi

    (Department of Commerce, Doshisha University)

  • Kohei Shiozawa

    (Graduate School of Economics, Osaka University)

Abstract

In this paper, we investigate a new concept of a market's commodity-information structure (a partition of the set of real goods that are treated as one commodity for market exchanges) and technologies relat- ing to it, commodity-information technologies. Using this concept, we can always affirmatively answer the market viability problem, concerning the existence of general equilibrium even when information asymmetry among agents such as adverse selection prevails in the economy. Some Pareto-optimality problems and policy implications are also discussed.

Suggested Citation

  • Ken Urai & Akihiko Yoshimachi & Kohei Shiozawa, 2014. "General Equilibrium Model with Information Asymmetry and Commodity-Information Technologies," Discussion Papers in Economics and Business 14-02, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1402
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    References listed on IDEAS

    as
    1. Michael Rothschild & Joseph Stiglitz, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(4), pages 629-649.
    2. Pradeep Dubey & John Geanakoplos & Martin Shubik, 2000. "Default in a General Equilibrium Model with Incomplete Markets," Cowles Foundation Discussion Papers 1247, Cowles Foundation for Research in Economics, Yale University.
    3. Bisin, Alberto & Gottardi, Piero, 1999. "Competitive Equilibria with Asymmetric Information," Journal of Economic Theory, Elsevier, vol. 87(1), pages 1-48, July.
    4. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    5. Ken Urai & Akihiko Yoshimachi & Kohei Shiozawa, 2013. "General Equilibrium Model for an Asymmetric Information Economy," Discussion Papers in Economics and Business 13-27, Osaka University, Graduate School of Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    General Equilibrium Model; Asymmetric Information; Adverse Selection; Market Via- bility Problem; Commodity-information Structure;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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