Market Demand Functions in the CAPM
15 Pages Posted: 1 Feb 1997
Date Written: October 1996
We demonstrate that in a CAPM economy Homogeneity,Walras' Law, and the Tobin Separation Property characterize market demand on finite sets of prices. Consequently, for any number n there exist CAPM economies which have at least n equilibria and hence have n different beta pricing formulas. Endowment pertubations in these economies cannot decrease the number of equilibria below n.
JEL Classification: C62, D51, G12
Suggested Citation: Suggested Citation