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Risk sharing and retrading in incomplete markets

Gottardi, Piero and Rahi, Rohit (2013) Risk sharing and retrading in incomplete markets. Economic Theory, 54 (2). pp. 287-304. ISSN 0938-2259

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Identification Number: 10.1007/s00199-012-0717-z


At a competitive equilibrium of an incomplete-markets economy agents’ marginal valuations for the tradable assets are equalized ex-ante. We characterize the finest partition of the state space conditional on which this equality holds for any economy. This leads naturally to a necessary and sufficient condition on information that would induce agents to retrade, if such information was to become publicly available after the initial round of trade.

Item Type: Article
Official URL:
Additional Information: © 2012 Springer Verlag
Divisions: Economics
Financial Markets Group
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
JEL classification: D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D52 - Incomplete Markets
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D80 - General
Date Deposited: 25 Apr 2013 14:41
Last Modified: 20 Aug 2021 00:53

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