Abstract
In complete contingent claim markets, we prove the existence of equilibrium with short sales. All agents have the same belief about the events, and have a strictly concave von Neuman-Morgenstern utility function of income. The result is based on a general equilibrium existence theorem without consumption constraints, which says that an equilibrium exists if there is limited trade surplus. We also show that preferences are uniformly proper if and only if the marginal utility of income is bounded away from 0 and ∞.
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