User:Lady Minna/Radner equilibrium

Radner equilibrium is an economic concept used by economists to describe the equilibrium in an economy where trade takes place over time. It is an extension of an Arrow-Debreu equilibrium and allows for the existence of spot markets. It was first described in 1972 by American economist Roy Radner in an article in Econometrica titled Existence of Equilibrium of Plans, Prices, and Price Expectations in a Sequence of Markets. Allocations in a Radner equilibrium will always be the same as they would have been in an Arrow-Debreu equilibrium provided that asset markets are complete.

Model
The model is simular to an Arrow-Debreu model except that there are multiple goods, assets, time periods and most importantly states. With multiple states the model introduces uncertainty into the economy.