Abstract
Abstract We consider the two-date model of a financial exchange economy ( E , F ) , with agents’ portfolio restrictions either represented by finitely many linear inequality constraints or satisfying Hart’s (1974) Weak No Market Arbitrage condition. The economy ( E , F ) is shown to have the same consumption equilibria as a reduced economy ( E , F ′ ) , for which the set of admissible portfolio allocations is bounded. Building upon the equilibrium existence result for reduced financial economies ( E , F ′ ) ( Aouani and Cornet, 2009), we then deduce the existence of equilibra of ( E , F ) , under standard assumptions on the consumption side and under the aforementioned assumption on the financial side.
Published Version
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