Abstract
This paper studies aggregation and a weak form of optimality referring to the p-weakly constrained Pareto efficiency (p-WE) in stochastic finance economies with incomplete markets. We derive a representative agent utility function maximized at equilibrium and a characterization of the set of p-WE allocations. Moreover, we establish the correspondence between the set of competitive equilibrium allocations and the set of p-WE allocations. It is noted that these are accomplished for general time-state utility functions and without restrictions on the initial resource allocations.
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Ma, C., Zhang, J. p-Weakly constrained Pareto efficiency and aggregation in incomplete markets. Soc Choice Welf 41, 605–623 (2013). https://doi.org/10.1007/s00355-012-0695-x
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DOI: https://doi.org/10.1007/s00355-012-0695-x