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Two-period economies with private state verification

Author

Listed:
  • Joao Correia-da-Silva

    (CEF.UP and Faculdade de Economia, Universidade do Porto)

  • Carlos Herves-Beloso

    (RGEA, Facultad de Economicas, Universidad de Vigo)

Abstract

Private state verification is introduced in a two-period economy with spot markets in both periods and complete futures markets for contingent delivery in the second period. Existence of equilibrium is established, under standard assumptions. An example is presented in which a complete set of contingent markets allows agents to arrive at the optimal allocation of risk-bearing, while securities are not sufficient.

Suggested Citation

  • Joao Correia-da-Silva & Carlos Herves-Beloso, 2010. "Two-period economies with private state verification," FEP Working Papers 374, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:fepwps:374
    as

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    File URL: http://www.fep.up.pt/investigacao/workingpapers/10.05.05_wp374.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. João Correia da Silva & Carlos Hervés-Beloso, 2012. "Existence and generic efficiency of equilibrium in two-period economies with private state-verification," FEP Working Papers 443, Universidade do Porto, Faculdade de Economia do Porto.

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    More about this item

    Keywords

    General equilibrium; Asymmetric information; Private state verification; Two-period economies;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • 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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