The Strong Sequential Core for Two-Period Economies

24 Pages Posted: 2 Oct 2001

See all articles by Arkadi Predtetchinski

Arkadi Predtetchinski

Maastricht University - Department of Economics

P. Jean-Jacques Herings

Tilburg University

Hans Peters

Maastricht University - Department of Quantitative Economics

Date Written: June 2001

Abstract

The strong sequential core for two-stage economies with a possibly incomplete set of assets in period zero and trade in commodities in period one consists of those goods allocations that are in the classical core and moreover, after realization of the state of nature, in the core of the economy where executed asset contracts serve as initial endowments. The strong sequential core coincides with the classical core when all possible state-contingent contracts may serve as an asset. For finance economies it is shown that the strong sequential core is generically empty when there is an incomplete set of assets. Outside the setting of finance economies, we show that the strong sequential core can be empty even if there is a complete set of assets. If the set of constrained feasible allocations resulting from trading in assets, is enlarged to include also allocations outside the agents' consumption sets, then a complete set of assets is sufficient for the equivalence of the resulting semi-strong sequential core and the classical core.

Suggested Citation

Predtetchinski, Arkadi and Herings, P. Jean-Jacques and Peters, Hans JM, The Strong Sequential Core for Two-Period Economies (June 2001). Available at SSRN: https://ssrn.com/abstract=285492 or http://dx.doi.org/10.2139/ssrn.285492

Arkadi Predtetchinski

Maastricht University - Department of Economics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31-43-3883636 (Phone)
+31-43-3884878 (Fax)

P. Jean-Jacques Herings (Contact Author)

Tilburg University ( email )

Department of Econometrics and Operations Research
P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 4668797 (Phone)
5000 LE (Fax)

HOME PAGE: http://https://sites.google.com/view/jean-jacques-herings/home

Hans JM Peters

Maastricht University - Department of Quantitative Economics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31-43-3883834 (Phone)
+31-43-3884874 (Fax)