TY  - GEN
AB  - We study a dynamic and infinite-dimensional model with Knightian
uncertainty modeled by incomplete multiple prior preferences. In interior
efficient allocations, agents share a common risk-adjusted prior
and use the same subjective interest rate. Interior efficient allocations
and equilibria coincide with those of economies with subjective
expected utility and priors from the agents' multiple prior sets. We
show that the set of equilibria with inertia contains the equilibria
of the economy with variational preferences anchored at the initial
endowments. A case study in an economy without aggregate uncertainty
shows that risk is fully insured, while uncertainty can remain
fully uninsured. Pessimistic agents with Gilboa-Schmeidler's max-min
preferences would fully insure risk and uncertainty.
DA  - 2010
KW  - Knightian Uncertainty
KW  - Ambiguity
KW  - Incomplete Preferences
KW  - General Equilibrium Theory
KW  - No Trade
LA  - eng
PY  - 2010
SN  - 0931-6558
TI  - Intertemporal equilibria with Knightian uncertainty
UR  - https://nbn-resolving.org/urn:nbn:de:0070-pub-29093145
Y2  - 2024-11-22T06:01:27
ER  -