On monopolistic equilibria with incomplete markets: the case of an exchange economy

In this paper, I exhibit some conditions which ensure the generic existence of a monopolistic equilibrium with incomplete markets. Nash pricing behaviours on commodity markets are introduced in a two-period and S state exchange economy with real assets. Financial markets still work competitively. A monopolistic equilibrium with no arbitrage is introduced and the pricing strategies are constructed by means of an objective demand curve. Conditions ensuring its existence are given. (C) 1998 Elsevier Science S.A.