TY  - JOUR
AU  - Honkapohja,Seppo
AU  - Ito,Takatoshi
TI  - Non-Trivial Equilibrium in an Economy With Stochastic Rationing
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 322
PY  - 1979
Y2  - February 1979
UR  - http://www.nber.org/papers/w0322
L1  - http://www.nber.org/papers/w0322.pdf
N1  - Author contact info:
Seppo Honkapohja
Bank of Finland
Finland
E-Mail: Seppo.Honkapohja@bof.fi

Takatoshi Ito
Graduate School of Economics
University of Tokyo
7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
JAPAN
Tel: 81-3-5841-5608
Fax: 81-3-5841-5521
E-Mail: ITOINTOKYO@aol.com
AB  - Stochastic rationing when the market does not clear draws attention because both Dreze (1975) and Benassy (1975) quantity-constrained equilibria have some undesirable features. Gale (1978)gave the existence proof of trade under uncertainty. His stochastic rationing depends on all the individual effective demands. It is too vague to characterize a rationing mechanism. Moreover, his assumption to ensure a non-trivial equilibrium is economically not clear. In this paper we extend Green (1978) to characterizing the rationing scheme as the individual effective demand times the rationing number which is a function of the aggregate quantity signals. We also construct an economy with money and overlapping generations. We show the existence of the non-trivial equilibrium and provide an example of a non-Wairasian equilibrium at the Walrasian equilibrium prices.
ER  -