No trade and yes trade theorems for heterogeneous priors

• 成果类型: Article
• 署名作者: Gizatulina, Alia; Hellman, Ziv
• 署名单位: University of St Gallen; Bar Ilan University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2019.04.006
• 发表日期: 2019
• 页码: 161-184
• 关键词: Speculative trade; no trade theorem; No betting theorem; common priors; common knowledge; rationality

摘要

We show that contrary to currently widely-held misperceptions, the classical no trade theorem obtains even under heterogeneous priors. That is, when priors are not common, speculative trade is still impossible under common knowledge of rationality. However, trade becomes mutually acceptable if at least one party to the trade puts at least some slight probability on the other party being irrational. We also derive bounds on disagreements in the case of heterogeneous priors and common p-beliefs. (C) 2019 Elsevier Inc. All rights reserved.