GENERICITY ANALYSIS ON THE PSEUDO-EQUILIBRIUM MANIFOLD

In this paper we study the size of the set of equilibria on the pseudo -equilibrium manifold. It is shown that, with incomplete real asset ma rkets, the set of equilibria is an open and dense subset of the pseudo -equilibrium manifold, whose complement is the disjoint union of a fin ite number of lower dimensional smooth submanifolds. When markets are generically complete, the pseudo-equilibrium manifold with fixed real asset structures is identical to the equilibrium manifold in the Arrow -Debreu model and the above result is still persistent. In addition, i t is shown that the complement of the set of equilibria is also a triv ial vector bundle over a semi-algebraic set. (C) 1997 Academic Press.