MARKET PARTICIPATION AND SUNSPOT EQUILIBRIA

We investigate the structure of competitive equilibria in an exchange economy parametrized by (i) endowments and (ii) restrictions on market participation. For arbitrary regular endowments, if few consumers are restricted, there are no sunspot equilibria. If endowments are allowe d to vary, while restrictions on market participation are fixed, there is a generic set of preferences such that sunspot equilibria exist fo r a non-empty subset of endowments. Our analysis extends to the genera l case of an arbitrary number of restricted consumers the results of C ass and Shell for the polar cases in which either (i) no consumers are restricted or (ii) all consumers are restricted.