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Endogenous differential information
Economic Theory (2016)
  • Sebastián Cea-Echenique
  • Carlos Hervés-Beloso, Universidad de Vigo
  • Juan Pablo Torres-Martínez, University of Chile

We include endogenous differential information in a model with sequential trade and incomplete financial participation. Agents update information through market signals given by commodity prices and asset deliveries. Information acts over admissible strategies and consumption tastes, allowing discontinuities in preferences and choice sets. Therefore, equilibrium may cease to exist. However, internalizing the compatibility between information and consumption through preferences, and without requiring either financial survival assumptions or fully revealing prices, equilibrium existence can be ensured.

  • Endogenous differential information,
  • Restricted participation,
  • Rational expectations equilibrium,
  • Incomplete markets
Publication Date
Citation Information
Cea-Echenique, S., C. Hervés-Beloso, and J.P. Torres-Martínez (2012): "Endogenous differential information in financial markets," working paper. Available at: