TY  - BOOK
AU  - Gabrieli,Tommaso
AU  - Ghosal,Sayantan
TI  - Non-existence of competitive equilibria with dynamically inconsistent preferences
SN  - 09382259
AV  - HB119 ECO 
PY  - 2013///
CY  - Berlin
PB  - Springer
KW  - Dynamically inconsistent preferences
KW  - Competitive equilibrium
KW  - Existence
KW  - Satiation
KW  - Non-convexity
N2  - This paper shows the robust non-existence of competitive equilibria even in a simple three period representative agent economy with dynamically inconsistent preferences. We distinguish between a sophisticated and naive representative agent. Even when underlying preferences are monotone and convex, at given prices, we show by example that the induced preference of the sophisticated representative agent over choices in first-period markets is both non-convex and satiated. Even allowing for negative prices, the market-clearing allocation is not contained in the convex hull of demand. Finally, with a naive representative agent, we show that perfect foresight is incompatible with market clearing and individual optimization at given prices
UR  - https://doi.org/10.1007/s00199-011-0623-9
ER  -