A multiperiod Drèze rule

Dierker, Egbert (2015) A multiperiod Drèze rule. Economic Theory Bulletin, 3 (2), pp. 129-151. DOI: 10.1007/s40505-015-0073-9

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The purpose of this paper is to extend the concept of a Drèze equilibrium to multi-period production economies with incomplete markets. Constrained efficiency cannot serve as a basis for such an extension, because multi-period models tend to violate even weak constrained efficiency requirements. Examples illustrate how the difficulties that arise in the case of sequential trade can be taken into account. Finally, the concept of minimal efficiency, which has been introduced by Dierker et al. (2005) in a two-period model, provides a way to derive an extension of the Drèze rule to finite trees. This is possible because minimal efficiency relies on a planner who can choose the production plan, but who cannot interfere with future consumption otherwise. (author's abstract)

Item Type: Article in Academic Journal
Keywords: Incomplete markets with production, The objective of a firm, Drèze equilibria with sequential trade, Efficiency and social welfare
Classification Codes (e.g. JEL): D21, D52, D61
Date Deposited: 22 May 2015 07:00
Last Modified: 01 Apr 2016 14:19
DOI: 10.1007/s40505-015-0073-9
ISSN: Print ISSN 2196-1085; Online ISSN 2196-1093
URI: https://irihs.ihs.ac.at/id/eprint/3435

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