Fratini, Saverio M. and Levrero, Enrico Sergio (2009): A remark on the supposed equivalence between complete markets and perfect foresight hypothesis.

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Abstract
We consider a sequential equilibrium model over two periods, during the first of which agents have perfect information and their expectations are formed as if there were complete future markets. We show that, in the second period, equilibrium prices may well be different from those expected, without any unexpected change having occurred. This result highlights a lack of correspondence between the perfect foresight hypothesis and that of complete markets.
Item Type:  MPRA Paper 

Original Title:  A remark on the supposed equivalence between complete markets and perfect foresight hypothesis 
Language:  English 
Keywords:  ArrowDebreu equilibrium, Complete markets, Sequential equilibrium, Perfect foresight, Indeterminacy 
Subjects:  D  Microeconomics > D4  Market Structure, Pricing, and Design > D46  Value Theory D  Microeconomics > D8  Information, Knowledge, and Uncertainty > D84  Expectations ; Speculations D  Microeconomics > D5  General Equilibrium and Disequilibrium > D51  Exchange and Production Economies 
Item ID:  15988 
Depositing User:  Saverio M. Fratini 
Date Deposited:  01. Jul 2009 09:13 
Last Modified:  15. Feb 2013 20:34 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/15988 