Aggregate Preferred Correspondence and the Existence of a MREE

Abstract

In this paper, a general model of a pure exchange differential information economy is studied. In this economic model, the space of states of nature is a complete probability measure space, the space of agents is a measure space with a finite measure, and the commodity space is the Euclidean space. Under appropriate and standard assumptions on agents' characteristics, results on continuity and measurability of the aggregate preferred correspondence in the sense of Aumann in [4] are established. These results together with other techniques are then employed to prove the existence of a maximin rational expectations equilibrium (maximin REE) of the economic model.

14 pages