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Competitive Equilibria in a Barter. Overlapping Generations Economy

1991; Springer Science+Business Media; Linguagem: Inglês

10.1007/978-3-642-46755-4_3

2196-9957

Joan Esteban,

Business Strategy and Innovation

Consumers seek to maximise their utility under the constraints imposed, by their own resources and the available markets. The fact that some markets might not be in operation would have to be taken into account by consumers when making their choices. For the time being we shall assume that the market structure is complete and therefore that spot and future markets operate at each date. In an Arrow-Debreu economy, the existence of a complete set of spot and future markets implies that all transactions take place at the begining of the economy. In the subsequent periods agents simply deliver and collect the goods they contracted for. However, in Overlapping Generations economies, the fact that in every period there are new consumers entering the economy induces a completely different picture. For markets will have to reopen and new trades will take place at each date.