Essays in General Equilibrium Theory
Festschrift for David Cass

Guest Editors’ Introduction

Alessandro Citanna 1 , John Donaldson 2 , Herakles Polemarchakis 3 ,
Paolo Siconolfi 4 , and Stephen Spear 5
1
Department of Economics and Finance, HEC, Paris, France
(email: citanna@hec.fr)
and Finance and Economics Division, Graduate School of Business, Columbia
University, New York, NY 10027 (email: ac2258@columbia.edu)
2
Finance and Economics Division, Graduate School of Business, Columbia
University, New York, NY 10027 (email: jd34@columbia.edu)
3
Department of Economics, Brown University, Providence, RI 02912
(email: Herakles Polemarchakis@brown.edu)
4
Finance and Economics Division, Graduate School of Business, Columbia
University, New York, NY 10027 (email: ps17@columbia.edu)
5
Tepper School of Business, Carnegie Mellon University, Pittsburgh, PA 15213
(email: ss1f@andrew.cmu.edu)
This book is a supplement to the special edition of Economic Theory hon-
oring David Cass on the 30 th anniversary of his joining the faculty at the
University of Pennsylvania’s Economics Department.

Table of Contents
Suleyman Basak and Anna Pavlova
Monopoly Power and the Firm’s Valuation: A Dynamic Analysis
of Short versus Long-Term Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1
Christian Bidard
Revealed Intertemporal Inefficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   35
Graciela Chichilnisky and Olga Gorbachev
Volatility and Job Creation in the Knowledge Economy . . . . . . . . . . . . .   45
Thorsten Hens, J´anos Mayer, and Beate Pilgrim
Existence  of  Sunspot  Equilibria  and  Uniqueness  of  Spot  Market
Equilibria: The Case of Intrinsically Complete Markets  . . . . . . . . . . . . .   75
Mukul Majumdar and Nigar Hashimzade
Survival, Uncertainty, and Equilibrium Theory: An Exposition . . . . . . . 107
Richard McLean, James Peck, and Andrew Postlewaite
On Price-Taking Behavior in Asymmetric Information Economies . . . . 129
Sujoy Mukerji and Jean-Marc Tallon
Ambiguity Aversion and the Absence of Indexed Debt . . . . . . . . . . . . . . 143
Tito Pietra
Sunspots, Indeterminacy and Pareto Inefficiency in Economies
With Incomplete Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
Aldo Rustichini and Paolo Siconolfi
Growth in Economies With Non Convexities:
Sunspots and Lottery Equilibria, Theory and Examples . . . . . . . . . . . . . 203
Jamsheed Shorish and Stephen Spear
Shaking the Tree:
An Agency-Theoretic Model of Asset Pricing . . . . . . . . . . . . . . . . . . . . . . 243
Neil Wallace
Central-Bank Interest-Rate Control
in a Cashless, Arrow-Debreu Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267