Advances in Economic Theory: Volume 2

'[This book] is essential reading for anyone who is interested in the present state of economic theory and its likely future direction. Between them the papers cover almost all the areas of economic theory which were most active in the latter part of the 1980s (all of them still highly active today). All the papers are lucid and well presented … and in some cases … will remain for some time to come the best introduction to the subject for graduate students and other non-specialists.' Robert Evans, The Economic Journal

• 1. Behaviour under risk: recent developments in theory and applications Lawrence Epstein; 2. Financial contracting theory Milton Harris and Arthur Raviv; 3. Collusion and the theory of organisations Jean Tirole; Discussion of Harris/Raviv and Tirole Patrick Bolton; 4. The nature of incomplete security markets Darrell Duffle; 5. Incomplete financial markets and indeterminacy of competitive equilibrium David Cass; 6. Endogenous fluctuations Roger Guesnerie and Michael Woodford; 7. Equilibrium in competitive, infinite dimensional settings Larry E. Jones; Discussion of Jones Andreu Mas-Collel.