%0 Journal Article %T Pooling and endogenous market incompleteness %+ Groupement de Recherche et d'Etudes en Gestion à HEC (GREGH) %A Citanna, Alessandro %A Villanacci, Antonio %< avec comité de lecture %@ 0938-2259 %J Economic Theory %I Springer Verlag %V Vol.24,n°3 %P pp.549-560 %8 2004-10-01 %D 2004 %R 10.1007/s00199-004-0489-1 %K Incomplete financial markets %K Endogenous asset formation %K Financial pooling %K Indeterminacy of equilibria %Z Humanities and Social Sciences/Economics and Finance/domain_shs.eco.ecoJournal articles %X We study a financial market economy with a continuum of borrowers and pooling of borrowersrsquo promises. Under these conditions and in the absence of designing costs, utility-maximizing decisions of price-taking borrowers may lead to financial market incompleteness. Parametrizing equilibria through the borrowersrsquo no-arbitrage beliefs, we link expectations to the financial market structure. Markets are complete if and only if borrowersrsquo beliefs are homogeneous. Price-taking behavior causes a coordination problem which in turn yields indeterminacy and inefficiency of equilibrium allocations. %G English %L hal-00463224 %U https://hec.hal.science/hal-00463224 %~ SHS %~ HEC %~ CNRS %~ AO-ECONOMIE