Dropping rational expectations (Q2070557)

The authors consider a two-period pure-exchange economy, where uncertainty prevails and agents, possibly asymmetrically informed, exchange commodities and securities of all kinds. Consumers' characteristics, anticipations, beliefs and actions are all private and typically not known nor assessed by the other agents. In the paper is defined a notion of ``correct foresight equilibrium'', which permits to generalize various concepts of rational expectations equilibria. This ``correct foresight equilibrium'' is shown to exist whenever agents' anticipation sets include the minimum uncertainty set.