Production and financial policies under asymmetric information (Q926204)

Based on earlier works on equilibrium in pure exchange economies with asymmetric information the authors deliver an extension to production economies. This is mathematically interesting since under standard assumptions equilibria exist but there are generic inefficiency results of following type (generic constrained suboptimality): Under the assumption that there is a generic set of endowments there exists a generic set of economies, such that for every one of such economies competitive equilibria are not Pareto optimal. The results of the paper are illustrated by three examples.