Determinacy and Indeterminacy of Equilibria
This article discusses work on the determinacy and indeterminacy of equilibria in models of competitive markets. Determinacy typically refers to situations in which equilibria are finite in number, and local comparative statics can be precisely described. The article describes basic results on generic determinacy for exchange economies and the general underlying principles, together with various applications and extensions including incomplete financial markets and markets with infinitely many commodities.
KeywordsAmbiguity aversion Arrow–Debreu model Comparative statics Concavity Continuous-time trading Continuum of equilibria Determinacy and indeterminacy of equilibria Edgeworth box economy Excess demand functions Existence of equilibrium Implicit function theorems Incomplete markets Infinite horizons Infinite-dimensional economies Lipschitz continuous functions Loss aversion Multiple equilibria Reference dependence Restricted participation Sard’s th Transversality th Uniqueness of equilibrium Walras’s Law
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