Economic Theory

, Volume 55, Issue 2, pp 439–455 | Cite as

Irrelevance of private information in two-period economies with more goods than states of nature

Research Article

Abstract

We introduce a two-period economy with asymmetric information about the state of nature that occurs in the second period. Each agent is endowed with an information structure that describes her (incomplete) ability to prove whether or not a state has occurred. We show that if the number of states of nature is not greater than the number of goods, then, generically, the equilibria of the associated full information economy are also equilibria of the asymmetric information economy. The information structures of the agents are, in that sense, irrelevant.

Keywords

General equilibrium Asymmetric information  Private state-verification Two-period economies  Generic existence of equilibrium Generic efficiency 

JEL Classification

C62 C72 D51 D82 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  1. 1.CEF.UP and Faculdade de EconomiaUniversidade do PortoPortoPortugal
  2. 2.RGEA, Facultad de EconómicasUniversidad de VigoVigoSpain

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