Econometrica Vol. 55 No. 2 1987
Market Equilibrium with Hidden Knowledge and Self-Selection
Abstract
The problem of the existence of a competitive equilibrium in models with hidden knowledge and self-knowledge has been discussed previously by M. Rothschild and J. E. Stiglitz_(1976), C. A. Wilson_(1977), and J. G. Riley_(1979). Recent analyses of such models by I. Cho and D. Kreps_(1986) and Riley argue for a particular outcome - the Pareto-dominant separating, zero-profit one. The authors prove the existence of such an outcome under very general conditions and, generalizing the reactive equilibrium concept introduced by Riley, they prove this outcome is the unique reactive equilibrium.
- DOI
- 10.2307/1913244
- Volume
- 55
- Issue
- 2
- Pages
- 425
- Sources
- bibtex:phds-export.bib crossref openalex