The theory of incomplete markets is an extension of the general equilibrium approach to intertemporal economies with uncertainty, where the set of available contracts which can be used to transfer wealth across time is limited relative to the possible probabilistic states that an economy might find itself in.
The theory of incomplete markets is an extension of the general equilibrium approach to intertemporal economies with uncertainty. The set of available contracts is limited relative to the possible probabilistic states that an economy might find itself in. These available contracts can be used to transfer wealth across time.