Differential Information Economies: Contract Based Approach

Abstract

Differential information economies are investigated from the viewpoint of contract based approach, developed in series of author’s papers. The key idea of the approach is to change the study of a “final” allocation of commodities with (different forms) stable webs of barter contracts which implement the allocation. This way main DIE equilibrium notions are clarified and the most significant kinds of core and domination are extracted and their conformity with Walrasian Expectations Equilibrium (WEE) and Rational Expectations Equilibrium (REE) is provided. The series of new concepts of core and domination and appropriate equilibrium notions are introduced: core and equilibrium with differentiated agents (well correspond to conditional expected utilities), interim core and equilibrium. The last one is closely related with REE-equilibrium and clarifies that is an appropriate core and kind of stability. There are proven new theorems on existence of core and quasi-equilibria.

Keywords: differentiated information, contractual approach, Walrasian Expectations Equilibrium, Rational Expectations Equilibrium

JEL Classification: C62, D51