NO TRADE AND YES TRADE THEOREMS FOR HETEROGENEOUS PRIORS

Type
working paper
Date Issued
2018-06-01
Author(s)
;
Hellman, Ziv
Abstract
We show that even under heterogeneous priors the classical no trade theorem obtains. However, speculative trade becomes mutually acceptable if at least one party to the trade puts at least some slight probability on the other party being irrational. We also derive bounds on disagreements in the case of heterogeneous priors and p-common beliefs.
Language
English
Keywords
trade theorem
common knowledge
rationality
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Quantitative Economic Methods
URL
Subject(s)

economics

social sciences

Division(s)

SEPS - School of Econ...

FGN - Institute of Ec...

Eprints ID
254610
File(s)
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HeteroTradeJuillet2018changed-2.pdf

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344.63 KB

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Adobe PDF

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