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Self-fulfilling mechanisms and rational expectations in large markets
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UNSPECIFIED (2003) Self-fulfilling mechanisms and rational expectations in large markets. JOURNAL OF MATHEMATICAL ECONOMICS, 39 (5-6). pp. 421-431. doi:10.1016/S0304-4068(03)00014-4 ISSN 0304-4068.
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Official URL: http://dx.doi.org/10.1016/S0304-4068(03)00014-4
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 | ||||
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Subjects: | H Social Sciences > HC Economic History and Conditions Q Science > QA Mathematics H Social Sciences |
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Journal or Publication Title: | JOURNAL OF MATHEMATICAL ECONOMICS | ||||
Publisher: | ELSEVIER SCIENCE SA | ||||
ISSN: | 0304-4068 | ||||
Official Date: | July 2003 | ||||
Dates: |
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Volume: | 39 | ||||
Number: | 5-6 | ||||
Number of Pages: | 11 | ||||
Page Range: | pp. 421-431 | ||||
DOI: | 10.1016/S0304-4068(03)00014-4 | ||||
Publication Status: | Published |
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