Abstract

The Arrow-Debreu intertemporal general equilibrium paradigm is typically interpreted as suggesting that contingent claims markets need not reopen as time passes and uncertainty resolves. We show that this property, if satisfied, has strong implications for the structure of agents' preferences and for the updating of probabilistic beliefs.

Citation

Donaldson, John, and Larry Selden. "Arrow-Debreu Preferences and the Reopening of Contingent Claims Markets." Economics Letters 8 (1981): 209-216.

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