Stabsseminar ved Piero Gottardi

Piero Gottardi fra University of Venice holder stabsseminar ved Institutt for foretaksøkonomi fredag 6. april.

05.04.2001 - Elin F. Styve

Tema er Efficient Competitive Equilibria with Adverse Selection

Tid og sted:
Fredag 6. april, kl. 1215-1330 i Karl Borchs Aud.

Abstract
Are there fundamental conceptual problems associated to the notion of Walrasian equilibrium for economies with adverse selection? The paper provides a (negative) answer to such question, posed by
Prescott-Townsend (1984). We identify an externality associated with the presence of adverse selection as a special form of consumption externality. An enlarged structure of markets is introduced then which allows to internalize such externality. For such market structure we show that Walrasian equilibria exist; in addition, incentive constrained versions of the first and second theorems of welfare economics hold. On the other hand, when this "expanded" set of markets required to internalize the externality is not present, Walrasian equilibria still exist but are not, typically, incentive efficient. It is shown that they satisfy an appropriately defined notion of third best efficiency, and the second welfare theorem also holds for this market structure.

Paper kan hentes fra Gottardis hjemmeside på Internett: http://helios.unive.it/~gottardi/rspt120600.pdf.