Ex-post core, fine core and rational expectations equilibrium allocations

This paper investigates the (weak) ex-post core and its relationships to the fine core and the set of rational expectations equilibrium allocations in an oligopolistic economy with asymmetric information, in which the set of agents consists of some large agents and a continuum of small agents and th...

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Bibliographic Details
Published in:Journal of mathematical economics 2018-01, Vol.74, p.128-138
Main Authors: Bhowmik, Anuj, Cao, Jiling
Format: Article
Language:English
Subjects:
Agents
Allocations
Asymmetric information
Aumann’s Core–Walras Equivalence Theorem
Economic models
Equilibrium
Ex-post core
Fine core
Oligopoly
Probability
Pure exchange mixed economy
Rational expectations
Rational expectations equilibrium
Studies
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Summary:This paper investigates the (weak) ex-post core and its relationships to the fine core and the set of rational expectations equilibrium allocations in an oligopolistic economy with asymmetric information, in which the set of agents consists of some large agents and a continuum of small agents and the space of states of nature is a general probability space. We show that under appropriate assumptions, the (weak) ex-post core is not empty and contains the set of rational expectations equilibrium allocations. We provide an example of a pure exchange continuum economy with asymmetric information and infinitely many states of nature, in which the ex-post core does not coincide with the set of rational expectations equilibrium allocations. We also show that when our economic model contains either no large agents or at least two large agents with the same characteristics, the fine core is contained in the ex-post core.
ISSN:0304-4068
1873-1538
DOI:10.1016/j.jmateco.2017.12.001