Abstract
An example shows that when preferences change over time and consumers are sophisticated, it is possible that arbitrage opportunities exist in frictionless markets, even in equilibrium.
| Original language | English |
|---|---|
| Pages (from-to) | 389-393 |
| Number of pages | 5 |
| Journal | Economic Theory |
| Volume | 34 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 2008 |
| Externally published | Yes |
JEL classifications
- g12 - "Asset Pricing; Trading volume; Bond Interest Rates"
- d50 - General Equilibrium and Disequilibrium: General
- d90 - Intertemporal Choice and Growth: General
Keywords
- arbitrage
- equilibrium
- Time-inconsistent preferences
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