Believing in Multiple Equilibria
- Believing in Multiple Equilibria
- Chichilnisky, Graciela
Heal, Geoffrey M.
Streufert, Peter A.
Swinkels, Jeroen M.
- Working papers
International and Public Affairs
- Persistent URL:
- Department of Economics Discussion Papers
- Part Number:
- Department of Economics, Columbia University
- Publisher Location:
- New York
- If agents have common priors concerning the probability with which equilibrium is selected, they have an incentive to trade beforehand. If their trading process satisfies a certain notion of individual rationality, these trades will reduce and ultimately remove all uncertainty concerning equilibrium selection. In this sense, multiple equilibria engender institutions which can uniquely determine equilibrium.
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- Suggested Citation:
- Graciela Chichilnisky, Geoffrey M. Heal, Peter A. Streufert, Jeroen M. Swinkels, 1992, Believing in Multiple Equilibria, Columbia University Academic Commons, http://hdl.handle.net/10022/AC:P:15576.