UNSPECIFIED (2003) Self-fulfilling mechanisms and rational expectations in large markets. JOURNAL OF MATHEMATICAL ECONOMICS, 39 (5-6). pp. 421-431. ISSN 0304-4068

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Abstract

We extend an equivalence theorem proved by Forges and Minelli [Journal of Economic Theory 75 (1997) 388] to a market game, which does not require that a specific commodity is used as money. Under the assumption that the set of commodities is a net, we show an equivalence between the set of allocations generated by self-fulfilling mechanisms and the set of rational expectations equilibrium allocations. We construct an example, which shows that this equivalence breaks down when the net assumption fails to hold: in such cases, traders cannot obtain, through a self-fulfilling mechanism, the information revealed by rational expectations equilibrium prices. (C) 2003 Elsevier Science B.V. All rights reserved.

Item Type:	Journal Article
Subjects:	H Social Sciences > HC Economic History and Conditions Q Science > QA Mathematics H Social Sciences
Journal or Publication Title:	JOURNAL OF MATHEMATICAL ECONOMICS
Publisher:	ELSEVIER SCIENCE SA
ISSN:	0304-4068
Date:	July 2003
Volume:	39
Number:	5-6
Number of Pages:	11
Page Range:	pp. 421-431
Publication Status:	Published
URI:	http://wrap.warwick.ac.uk/id/eprint/9531

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