Notes on the suboptimality result of J. D. Geanakoplos and H. M. Polemarchakis (1986)

Authors

  • Antonio Jimenez Martínez Universidad de Guanajuato

DOI:

https://doi.org/10.24201/ee.v22i1.146

Keywords:

incomplete asset markets, constrained suboptimality, transversality theory

Abstract

J.D. Geanakoplos and H.M. Polemarchakis (1986) prove the generic constrained suboptimality of equilibrium allocations in two period economies with incomplete markets. They perturb asset prices at equilibrium when the degree of market incompleteness equals one. Since prices do not parameterize the economy, a generic result cannot be obtained in such way. These notes provide a detailed version of their proof in which utilities and endowments are perturbed.

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Published

2007-01-01

How to Cite

Jimenez Martínez, A. (2007). Notes on the suboptimality result of J. D. Geanakoplos and H. M. Polemarchakis (1986). Estudios Económicos De El Colegio De México, 22(1), 111–136. https://doi.org/10.24201/ee.v22i1.146

Issue

43-vol. 22, no. 1, january-june, 2007

Section

Articles