Stable sets for asymmetric information economies

An exchange economy with asymmetrically informed agents is considered with an exogenous rule that regulates the information sharing among agents. In this context, the notion of stable sets à la von Neumann and Morgenstern is analyzed. Two different frameworks are taken into account as regards prefer...

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Bibliographic Details
Published in:International journal of economic theory 2015-03, Vol.11 (1), p.137-154
Main Authors: Graziano, Maria Gabriella, Meo, Claudia, Yannelis, Nicholas C.
Format: Article
Language:English
Subjects:
asymmetric information
information sharing
stable sets
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Summary:An exchange economy with asymmetrically informed agents is considered with an exogenous rule that regulates the information sharing among agents. In this context, the notion of stable sets à la von Neumann and Morgenstern is analyzed. Two different frameworks are taken into account as regards preferences: a model without expectations and a model with expected utilities. For the former, it is shown that the set V of all individually rational, Pareto optimal, symmetric allocations is the unique stable set of symmetric allocations. For the latter, an example is presented which shows that the same set V is not externally stable and a weaker result is proved.
ISSN:1742-7355
1742-7363
DOI:10.1111/ijet.12057