Competitive Equilibria With Incomplete Markets and Endogenous Bankruptcy
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Issue Date
2003Author
Sabarwal, Tarun
Publisher
Walter de Gruyter
Type
Article
Article Version
Scholarly/refereed, publisher version
Metadata
Show full item recordAbstract
This paper constructs a model of an exchange economy in which bankruptcy arises in a manner
similar to what we observe. Compared to related models, this model is a more realistic representation of some markets in which intertemporal assets are traded. Using standard and natural assumptions, it is shown that every economy represented by this model has an equilibrium. Therefore,bankruptcy can co-exist with smoothly functioning competitive markets in fairly general economies. Examples highlight some welfare effects of bankruptcy.
Description
This is the publisher's version, also available electronically from http://dx.doi.org/ 10.2202/1534-5971.1060.
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Citation
Sabarwal, Tarun (2003): “Competitive Equilibria with Incomplete Markets and Endogenous Bankruptcy,” Contributions to Theoretical Economics, 3(1), Jan., Art. 1 (Lead article) http://dx.doi.org/10.2202/1534-5971.1060
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