An equivalence theorem for a differential information economy

  1. Moreno García, Emma
  2. Hervés Beloso, Carlos
  3. Yannelis, Nicholas C.
Working paper series ( RGEA )

Ano de publicación: 2004

Número: 1

Tipo: Documento de traballo


In a pure exchange economy with di_erential information and a finite set of traders, physical commodities and states of nature, we characterize the Walrasian expectations or Radner equilibria by using the veto power of the grand coalition. We prove that an allocation x is a Radner equilibrium allocation if and only if it is"privately non-dominated" by the grand coalition in every economy obtained by perturbing the original initial endowments in the direction of x. The first and second welfare theorems become particular cases of our main result. Since the deterministic Arrow-Debreu-McKenzie model is a special case of the di_erential information economy model we also provide a new characterization of the Walrasian equilibria.