May lack of information be the real invisible hand? (Work in progress.)

摘要: Pareto improving intervention may be impossible not because it does exist, but is for a planner to figure out one. In this paper, we show that finite sets of market data suffice able design policies. an incomplete markets economy, after asset have closed, there typically exist Paretoimproving reallocations. The question naturally arises is: how much need know if he one such reallocation? Existing identification results (Kubler et al., 2002, or Carvajal and Riascos, 2004) require knowledge the equilibrium manifold unrealistic. If informational requirement finding Pareto-improving policies implausible, performance questionable on efficiency grounds. We here information in nonstationary economy provide enough policies, even when these are likely exist. When available set prices endowments, prove multiple rationalizations which welfare effects economic policy go opposite directions.