Nonnegative Wealth, Absence of Arbitrage, and Feasible Consumption Plans (Hardcover) (ISBN-13: 9781024200799)

This technical paper delves into the theoretical relationship between nonnegative wealth, the absence of arbitrage, and feasible consumption plans within a financial economics framework. Authored by Philip H. Dybvig and Chi-fu Huang of the Sloan School of Management, the study provides rigorous analysis applicable to advanced research in financial modeling and economic theory. It examines conditions under which economic agents can construct consumption plans that are both feasible and consistent with the fundamental principle of no-arbitrage, ensuring that no risk-free profit opportunities exist in the market. The paper explores how the requirement of nonnegative wealth impacts the structure of optimal consumption and investment strategies. A key resource for academics and researchers working on mathematical finance and economic equilibrium.

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