PARTIALLY-REVEALING RATIONAL-EXPECTATIONS EQUILIBRIUM IN A COMPETITIVE ECONOMY

A class of pure exchange economies is considered in which some agents are informed of private information and others are uninformed. Existence of a partially-revealing rational expectations equilibrium (REE) is proved-without restricting attention to particular functional forms for utility functions and probability distributions, without introducing "noise" into the model, and without departing from the standard definition of REE. The equilibrium is robust in the sense that if the primitives of the economy are slightly perturbed, the economy continues to have a qualitatively-similar REE. With somewhat stronger assumptions placed on the economy, the equilibrium is also the unique measurable REE. © 1990.