Speaker：Dr Jianbo  Zhang (Associate Professor of University of Kansas )

Time: 1:30pm, Jan.13, 2015

Place: ISEM Conference Room (3rd floor, Chengming Building)

时间：2015年1月13日（周二）下午1:30

主讲人：Jianbo Zhang（堪萨斯大学副教授）                

地点：国际经济管理学院会议室（诚明楼三层）

主办方：国际经济管理学院

Adding an Apple to an Orange: the equilibrium aggregation of beliefs

Jianbo Zhang

Abstract: This paper presents a new answer to the old question of how to aggregate individual beliefs. We construct a model which allows agents to take arbitrage opportunities against the aggregated belief by making contingent claims against the states, and the aggregator (market maker) regulates the probability of states. When all claims from the agents are mutually covered for every realization of the state, an aggregation of individual beliefs is thus obtained. We prove the existence and uniqueness of the equilibrium aggregation, and also show that the aggregate belief lies in the convex hull of individual beliefs. This model allows us to address some important problems such as how individual agents attitude toward risk and wealth endowment affect the outcome of the aggregation process, and whether the aggregate belief satisfies the well-known properties like equal treatment.

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