Template-type: ReDif-Paper 1.0
Author-Name: Herings, P.J.J.
Author-workplace-name: Microeconomics & Public Economics
Author-Name: Polemarchakis, H.M.
Author-workplace-name: Externe publicaties SBE
Title: Pareto Improving Price Regulation when the Asset Market Is Incomplete
Abstract: Incomplete asset markets cause competitive equilibria to be constrained sub-optimal and provides scope for Pareto improving interventions. This paper examines how intervention in prices of spot market commodities may serve this purpose. We show that if fix-price equilibria behave sufficiently regular near Walrasian equilibria, Pareto improving price regulation is generically possible. We derive sufficient conditions for fix-price equilibria to be well-behaved in the neighborhood of a competitive equilibrium. An advantage of price regulation, contrasted with interventions in individuals' asset portfolios, is that it operates anonymously, on market variables.
Classification-JEL: d45,d52,d60
Series: METEOR Research Memorandum
Creation-Date: 20030101
Number: 035
File-URL: https://cris.maastrichtuniversity.nl/ws/files/51536324/Pareto_Improving_Price_Regulation_when_the_Asset_Market_Is_Incomplete.pdf
File-Format: application/pdf
File-Size: 301886
Handle: Repec:unm:umamet:2003035
DOI: 10.26481/umamet.2003035