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Content archived on 2024-06-16

Pushing the boundaries of general equilibrium theory with asymmetric Information

Objective

In general equilibrium models with time and uncertainty, even if markets are complete the competitive allocation of resources will nonetheless be inefficient in the presence of asymmetric information, especially when some traders have private information concerning future assets payoffs.

This inefficiency can in some cases be quite severe, leading even to the vanishing of some financial markets, limiting the scope of risk and uncertainty protection that the individuals in a given society can guarantee for themselves. If we could put aside the standard assumption in almost every general equilibrium model of price taking behaviour by all traders, it would be possible to introduce strategic behaviour, communication, and signalling in these models in such a way that at least part of the private information could be revealed, thus leading to an increase in overall economic efficiency.

This is the main objective of this proposal, to develop new economic general equilibrium models that could enlighten us about these problems, and give us (and hopefully some decision makers) clues on how to contribute to improve financial markets efficiency, which is a matter of extreme importance. This type of problem has been the researcher PhD Dissertation fundamental goal, but he intends to pursue this same line of research even further, by visiting two highly rated European economic research departments as a postdoctoral fellow.

The type of problems he tries to solve pose very difficult modeling mathematical problems, and for this reason it will be very beneficial the contact that he will have with innumerous mathematicians and mathematical economists that work or collaborate at CERMSEM, as well as the realization of joint research with Piero Gottardi (University of Venice), one of the world's leading researchers in the field of general equilibrium with asymmetric information.

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Keywords

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Topic(s)

Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.

Call for proposal

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FP6-2002-MOBILITY-5
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Funding Scheme

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EIF - Marie Curie actions-Intra-European Fellowships

Coordinator

UNIVERSITE DE PARIS I - SORBONNE - PANTHEON
EU contribution
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Address
Place du Pantheon 12
PARIS
France

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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

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