Indeterminacy and bankruptcy: a note
Résumé
It is shown in a model where agents can have different support for their expectations of states of the world, that the real indeterminacy result usual in the literature on incomplete markets holds true. This is shown on a simple example. Since in this type of models bankruptcy might occur, the result is further characterized. It is shown that equilibria without bankruptcy are indeterminate, whereas equilibrium allocations with bankruptcy are locally isolated although the rate of default is indeterminate.
Domaines
Sciences de l'Homme et SociétéOrigine | Fichiers produits par l'(les) auteur(s) |
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