TY - JOUR
T1 - Endogenous differential information
AU - Cea-Echenique, Sebastián
AU - Hervés-Beloso, Carlos
AU - Torres-Martínez, Juan Pablo
N1 - Publisher Copyright:
© 2015, Springer-Verlag Berlin Heidelberg.
PY - 2017/1/1
Y1 - 2017/1/1
N2 - We include endogenous differential information in a model with sequential trade and incomplete financial participation. Agents update information through market signals given by commodity prices and asset deliveries. Information acts over admissible strategies and consumption tastes, allowing discontinuities in preferences and choice sets. Therefore, equilibrium may cease to exist. However, internalizing the compatibility between information and consumption through preferences, and without requiring either financial survival assumptions or fully revealing prices, equilibrium existence can be ensured.
AB - We include endogenous differential information in a model with sequential trade and incomplete financial participation. Agents update information through market signals given by commodity prices and asset deliveries. Information acts over admissible strategies and consumption tastes, allowing discontinuities in preferences and choice sets. Therefore, equilibrium may cease to exist. However, internalizing the compatibility between information and consumption through preferences, and without requiring either financial survival assumptions or fully revealing prices, equilibrium existence can be ensured.
KW - Endogenous differential information
KW - Incomplete markets
KW - Rational expectations equilibrium
KW - Restricted participation
UR - http://www.scopus.com/inward/record.url?scp=84944627608&partnerID=8YFLogxK
U2 - 10.1007/s00199-015-0924-5
DO - 10.1007/s00199-015-0924-5
M3 - Article
AN - SCOPUS:84944627608
SN - 0938-2259
VL - 63
SP - 51
EP - 72
JO - Economic Theory
JF - Economic Theory
IS - 1
ER -