This research explores how an equilibrium evolves over a sequence of asymmetric information economies where economic agents learn more information from past observations. Agents are bounded rational in the sense that they optimize within a small error. Information is revealed over time by the realizations of equilibrium prices and allocations, which show the interactions among agents with asymmetric information. Two equilibrium notions under uncertainty are considered, (i) the Walrasian expectations equilibrium and (ii) the rational expectations equilibrium, and their convergence and stability are shown respectively.We begin with the examples which cast doubt on the appropriateness of the REE as a sensible solution concept. 1.1 Non-existence of REE First we show the example ... The following example is from Glycopantis and Yannelis (2005).
|Title||:||Essays on Learning and Stability in Asymmetric Information Economies|
|Publisher||:||ProQuest - 2008|