The existence of rational expectations equilibria in a large economy with noisy price observations (Q1069412)

Non-revealing rational expectations equilibria exist in micro-economic pure exchange economies in which a continuum of uninformed agents have suitably distributed noisy price observations. Slight dispersion in the prices observed by the subset of uninformed consumers is the key condition for continuity (and smoothness) of aggregate excess demand, although individual demands are discontinuous. It leads to equilibria in which markets approximately clear in a strong sense. The equilibria are obtained by applying a fixed-point argument to state-dependent excess demand functions.