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A price mechanism in economies with asymmetric information

Faias, Marta and Hervés-Beloso, Carlos and Moreno García, Emma (2009): A price mechanism in economies with asymmetric information.

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Abstract

In this paper we consider a pure exchange economy with a finite set of types of agents which have incomplete and asymmetric information on the states of nature. Our aim is to describe the equilibrium price formation and how the lack of information may affect the allocation of resources. For it, we adapt to an asymmetric information scenario a variant of the Shapley-Shubik game introduced by Dubey and Geanakoplos (2003).

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