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Incomplete markets, continuum of states and default

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We show that when bankruptcy, subject to penalties, is allowed, it is possible to prove the existence of equilibrium in a model with a continuum of states without imposing any assumptions on ex-post endowments.

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Received: November 20, 1995; revised version: September 16, 1996

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Araujo, A., Monteiro, P.K. & Páscoa, M.R. Incomplete markets, continuum of states and default. Economic Theory 11, 205–213 (1998). https://doi.org/10.1007/s001990050185

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  • DOI: https://doi.org/10.1007/s001990050185

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