Roy Radner

Last updated
Roy Radner
Born (1927-06-29) 29 June 1927 (age 93)
Nationality American
Alma mater University of Chicago
Scientific career
Fields Mathematical economics
Institutions University of California, Berkeley
Doctoral advisor Leonard Jimmie Savage

Roy Radner (born 29 June 1927) [1] is Leonard N. Stern School Professor of Business at New York University. [2] He is a micro-economic theorist. Radner's research interests include strategic analysis of climate change, bounded rationality, game-theoretic models of corruption, pricing of information goods, statistical theory of data mining. [3] Previously he was a faculty member at the University of California, Berkeley, and a Distinguished Member of Technical Staff at AT&T Bell Laboratories.

Contents

Radner equilibrium

Among Radner's various contributions, the one that bears his name, Radner equilibrium (1968), is a model of financial markets. [4] [5] [6] In the traditional approach if the value of an asset or a contingent claim is affordable then it can be achieved. Not so with incomplete market as the payoff has to be replicable by trading of available assets that are now part of the definition of the economy. The first consequence of such a requirement is that budget sets do not fill the available space and are typically smaller than hyperplanes. Because the dimension of vectors orthogonal to the budget set is larger than one there is no reason for the price systems supporting an equilibrium to be unique up to scaling, likewise the first order conditions no longer implies that gradient of agents are collinear at equilibrium. Both happen to fail to hold generically: the first theorem of welfare economics is hence the first victim of incompleteness. Pareto-optimality of equilibria generally does not hold. [7] In traditional complete markets any policy would be undone through trading of rational expectation agents. This is no longer the case with incomplete markets as such policy-neutralising trading is no longer necessarily possible. Various policies (tax-related, [8] monetary, [9] [10] etc. ) have an effect when introduced when markets are incomplete. Additionally incompleteness opens the door for a theory of financial innovation with real impact. [11] This was not possible in the traditional complete market general equilibrium model as any contingent claim could be replicated by trading and financial innovation would have no real effect.

Awards and recognition

Selected bibliography

Books
Journal articles

Related Research Articles

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References

  1. Roy Radner's Curriculum Vitae - NYU Stern School of Business
  2. http://pages.stern.nyu.edu/~rradner/
  3. https://www.stern.nyu.edu/faculty/bio/roy-radner
  4. Radner (Jan. 1968) "Competitive Equilibrium under Uncertainty", Econometrica, pp. 31-58.
  5. Chiaki Hara (2006) "General Equilibrium Theory: Lecture Note," Kyoto University. "Archived copy" (PDF). Archived from the original (PDF) on 2006-10-14. Retrieved 2006-10-14.CS1 maint: archived copy as title (link)
  6. Magill and Quinzii (2002) "Theory of incomplete markets. 1," MIT Press.
  7. Geanakoplos and Polemarchakis (1985) "Existence, Regularity, and Constrained Suboptimality of Competitive Allocations When the Asset Market Is Incomplete."
  8. John Geanakoplos and H. M. Polemarchakis (2008) "Pareto improving taxes,"
  9. Drèze, J.H. and Polemarchakis, H. (2001). "Monetary equilibria", ch. 5 in Debreu, G., Neuefeind, W. and Trockel, W. (eds.), Economics Essays. A Festschrift for Werner Hildenbrand, Berlin: Springer.
  10. Magill, M.; Quinzii, M. (1992). "Real effects of money in general equilibrium". Journal of Mathematical Economics. 21 (4): 301–342. CiteSeerX   10.1.1.218.7622 . doi:10.1016/0304-4068(92)90012-v.
  11. Elul, Ronel (1995). "Welfare Effects of Financial Innovation in Incomplete Markets Economies with Several Consumption Goods". Journal of Economic Theory . 65 (1): 43–78. doi:10.1006/jeth.1995.1002.