Uncertain equilibria and incomplete preferences

This paper studies the tendency for incomplete preference structures to be associated with equilibrium price indeterminacies in an Arrow-Debreu-McKenzie state-contingent setting, It is shown that the presence of a sufficiently smooth stochastic production technology is inconsistent with equilibrium price indeterminacies even if all individuals have incomplete preference structures. A particularly convenient characterization of Paretian equilibria in the presence of incomplete preferences, which allows Paretian equilibrium to be characterized using simple principles of convex optimization and (sub)differential analysis, is also developed. (C) 2014 Elsevier B.V. All rights reserved.