The equivalence of two rational expectations equilibrium economies with different approaches to processing neighbors' information

doi:10.1016/j.mathsocsci.2020.11.003

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	The equivalence of two rational expectations equilibrium economies with different approaches to processing neighbors' information
	Lou, Youcheng 1; Wang, Shouyang 1,2,3
	2021
发表期刊	MATHEMATICAL SOCIAL SCIENCES
ISSN	0165-4896
卷号	109 页码:93-105
摘要	We consider a finite-agent Hellwig (1980) economy with an extension to allow traders to observe their neighbors' signals in an exogenously given social network. There are two potential approaches for traders to process observed signals: directly infer information about the fundamentals from the complete collection of observed signals, or indirectly from an average of observed signals. The two approaches lead to different information sets for traders. In this study, we investigate whether the two economies corresponding to the two approaches are equivalent in the sense that they have the same market equilibrium. For general network and signal structures, we present a necessary and sufficient condition for the equivalence, revealing that the two finite-agent economies are not equivalent in general unless the network structure and signal structure coordinate well. When traders have homogeneous preferences and the signal structure takes the classical form in the literature, we find that the two finite-agent economies are equivalent for regular graphs, but not for chain and star graphs. Finally, for the classical signal structure, we show that the two large economies, defined as the limit of a sequence of replica finite-agent economies, are equivalent for any network structure. (C) 2020 Elsevier B.V. All rights reserved.
关键词	Rational expectations equilibrium Social networks Network structure Signal structure
DOI	10.1016/j.mathsocsci.2020.11.003
收录类别	SCI
语种	英语
资助项目	National Natural Science Foundation of China[71971208]
WOS研究方向	Business & Economics ; Mathematics ; Mathematical Methods In Social Sciences
WOS类目	Economics ; Mathematics, Interdisciplinary Applications ; Social Sciences, Mathematical Methods
WOS记录号	WOS:000610412600008
出版者	ELSEVIER
引用统计
文献类型	期刊论文
条目标识符	http://ir.amss.ac.cn/handle/2S8OKBNM/58114
专题	中国科学院数学与系统科学研究院
通讯作者	Lou, Youcheng
作者单位	1.Chinese Acad Sci, Acad Math & Syst Sci, MDIS, Beijing, Peoples R China 2.Chinese Acad Sci, Ctr Forecasting Sci, Beijing, Peoples R China 3.Univ Chinese Acad Sci, Sch Econ & Management, Beijing, Peoples R China
推荐引用方式 GB/T 7714	Lou, Youcheng,Wang, Shouyang. The equivalence of two rational expectations equilibrium economies with different approaches to processing neighbors' information[J]. MATHEMATICAL SOCIAL SCIENCES,2021,109:93-105.
APA	Lou, Youcheng,&Wang, Shouyang.(2021).The equivalence of two rational expectations equilibrium economies with different approaches to processing neighbors' information.MATHEMATICAL SOCIAL SCIENCES,109,93-105.
MLA	Lou, Youcheng,et al."The equivalence of two rational expectations equilibrium economies with different approaches to processing neighbors' information".MATHEMATICAL SOCIAL SCIENCES 109(2021):93-105.