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Necessary and Sufficient Conditions for Efficiency in an Economy with an Incomplete Set of Markets

Forsythe, Robert (1976) Necessary and Sufficient Conditions for Efficiency in an Economy with an Incomplete Set of Markets. Social Science Working Paper, 107. California Institute of Technology , Pasadena, CA. (Unpublished) https://resolver.caltech.edu/CaltechAUTHORS:20171030-134029670

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Abstract

Considerable attention has recently been focused on examining an economy in which there is not a complete set of markets. The nonexistence of certain markets is typically explained by either the presence of transaction costs or, in the case of contingent commodities, by a moral hazard argument. If, however, an efficient allocation of resources is achieved whenever certain markets are not present, it may be argued that the failure of these markets to exist occurs simply because they are not needed. Indeed, no trade would occur in these markets even if they were established since all individuals have imputed the same price to each nontraded commodity. The characterization of such an economy is the case with which this paper is concerned.


Item Type:Report or Paper (Working Paper)
Group:Social Science Working Papers
Series Name:Social Science Working Paper
Issue or Number:107
Record Number:CaltechAUTHORS:20171030-134029670
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20171030-134029670
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:82776
Collection:CaltechAUTHORS
Deposited By: Jacquelyn Bussone
Deposited On:30 Oct 2017 20:59
Last Modified:03 Oct 2019 18:58

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