Prove Proposition 17.7. In particular, show that if n ∗[K], then there exists a profitable deviation for a financial intermediary to offer securities for a previously unavailable sector and make positive profits, and that if n ∗[K], feasibility is violated. Proposition 17.7 Suppose that Q ≥ (2 − γ )q. Then given K(t), there exists a unique time t equilibrium where all sectors j ≤ n∗(t) = n∗[K(t)] are open and those j >n ∗[K(t)]are shut, where

Prove Proposition 17.7. In particular, show that if n ∗[K], then there exists a profitable deviation for a financial intermediary to offer securities for a previously unavailable sector and make positive profits, and that if n ∗[K], feasibility is violated. Proposition 17.7 Suppose that Q ≥ (2 − γ )q. Then given K(t), there exists a unique time t equilibrium where all sectors j ≤ n∗(t) = n∗[K(t)] are open and those j >n ∗[K(t)]are shut, where

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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