Authoritative and comprehensive, yet comprehensible. A remarkableblend of rigorous elegance and economic wisdom.
Jacques H. Dreze, CORE, Belgium
Great progress has been made in the past twenty years in the analysis of general competitive equilibrium with incomplete financial markets. This text makes the important results of the literature accessible to non-specialists for the first time. It is clearly written and stresses the geometric intuition behind the results. It develops a range of applications to central theoretical issues in financial and monetary economics, and provides a sense of the historical context of the work that is unusual in texts on mathematical economics. The book deserves to be studied by all monetary and financial economists who care about the analytical foundations of their subjects.
Michael Woodford, Professor of Economics, Princeton University
Magill and Quinzii have carefully and cogently summarized a large body of recent research on general equilibrium models of incomplete security markets. In its treatment of everything from the basic mathematical tools through to such applications as production and the role of money, Theory of Incomplete Markets is definitive, and is likely to remain so for a long time.
J. Darrell Duffie, Professor of Finance, Graduate School of Business, Stanford University
Once the notion of commodity was extended to future goods and to hedges against uncertainty, it became clear that not all markets for these goods exist. The study of incomplete markets developed gradually over the last twenty-five years and required both new ways of thinking and new techniques of analysis. The time is ripe for a survey, and Magill and Quinzii, both important contributors to the field, have shown their mastery here. Their exposition is the simplest consistent with careful study, and they have connected the current literature with its historic roots in exemplary fashion.
Kenneth J. Arrow, John Kenney Professor of Economics, Emeritus, and Professor of Operations Research, Emeritus, Department of Economics, Stanford University
By redefining the concept of a commodity, one can immediately extend the General Equilibrium model to uncertainty (as well as to time, and to space). But for this, markets must be complete. In an impressive book, Michael Magill and Martine Quinzii do this extension in the framework of the new theory of incomplete markets that they powerfully contributed to build. Their deep, original work, which aims at a wide audience of readers, contains a great wealth of knowledge for everyone of them.
Gerard Debreu, Professor of Economics, European University Institute
The frontier of research in General Equilibrium Theory today lies in the field of incomplete markets. The book by Magill and Quinzii gives an excellent account of this field by two of its principal cultivators. In addition the book is a pleasure to read.
Lionel McKenzie, Wilson Professor Emeritus of Economics at the University of Rochester
Theory of Incomplete Markets by Magill and Quinzii is certain to stimulate and excite future generations of students of econoics theory as my generation was inspired by Debreu's Theory of Value.
Donald J. Brown, Philip R. Allen Professor of Economics, Yale University
This is an ambitious book—as, indeed, is any serious effort to work through the ramifications of incomplete contracting. Professors Magill and Quinzii bring the rudiments of institutional economics (bounded rationality, opportunism, asset dependence, organization form) into general equilibrium theory in ways that have hitherto defied analysis. This is an important book.
Oliver E. Williamson, Edgar F. Kaiser Professor of Business Administration, Professor of Economics, and Professor of Law, University of California
Theory of Incomplete Markets is a very thorough book which contains an excellent introduction into some recent research in the active area of incomplete markets.
T. Hens
Journal of Economics
