Credit market segmentation, essentiality of commodities, and supermodularity

• Published in: Journal of mathematical economics Vol. 70; pp. 115 - 122
• Main Authors: Faias, Marta, Torres-Martínez, Juan Pablo
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01.05.2017; Elsevier Sequoia S.A
• Subjects: Ambiguity; Bond markets; Commodities; Consumption; Credit; Credit market segmentation; Economic models; Essential commodities; Expected utility; Loans; Market economies; Market segmentation; Markets; Smoothness; Supermodularity; Trading; Utility functions; Essential commodities; Credit market segmentation; Supermodularity

We consider incomplete market economies where agents are subject to price-dependent trading constraints compatible with credit market segmentation. Equilibrium existence is guaranteed when either commodities are essential, i.e, indifference curves through individuals’ endowments do not intersect the...