• Table of Contents
    • Abstract
    • Keywords
    • Article
      • Review of the Arrow–Debreu model of a complete market for present and future contingent delivery
      • Extension of the Arrow–Debreu model to the case in which different agents have different information
      • Choice of information
      • Critique of the extended Arrow–Debreu economy
      • Expectations and equilibrium in a sequence of markets
      • Equilibrium of plans, prices and price expectations
      • A canonical model of sequential trading
      • Production
      • Rational expectations equilibrium
      • Equilibrium and learning with imperfect price models
    • Bibliography
    • How to cite this article

uncertainty and general equilibrium

Mukul Majumdar and Roy Radner
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
Alternate versions available: 1987 Edition
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Abstract

This article reviews alternative approaches to incorporating uncertainty in Walrasian models. It begins with a sketch of the Arrow–Debreu model of complete markets. An extension of this framework allowing for economic agents to have different information about the environment is followed by a critique. When markets are incomplete and trades take place sequentially, several types of equilibrium concept arise according to the hypotheses we make about the way traders form their expectations. We present conditions for the existence of equilibria for two such equilibrium concepts, and discuss the possible failure to attain Paretian welfare optima.
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Keywords

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Article

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How to cite this article

Majumdar, Mukul and Roy Radner. "uncertainty and general equilibrium." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 22 October 2017 <http://www.dictionaryofeconomics.com/article?id=pde2008_U000007> doi:10.1057/9780230226203.1754

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