ELSEVIER Journal of Mathematical Economics 25 (1996) 165-179 Existence and properties of a value allocation for an economy with differential information Stefan Krasa, Nicholas C. Yannelis * Department of Economics, University of Illinois at Urbana-Champaign, Box 111, 330 Commerce West Building, 1206 South Sixth Street, Champaign, IL 61820, USA Submitted September 1994; accepted February 1995 Abstract We prove the existence of a private value allocation for an economy with differential information where the commodity space may be infinite dimensional, and there is a continuum of states. We also discuss the existence, non-existence, and properties of two alternative value allocation concepts. JEL classification: D8; D82; C7; C71; C72 Keywords: Private value allocation; Differential information economies; Coarse and fine value allocation 1. Introduction In a companion paper, Krasa and Yannelis (1994) introduced the concept of a private value allocation for an economy with differential information. This concept was presented as an alternative to the rational expectation equilibrium notion. In particular, we demonstrated that the private value allocation is coalitionally incentive-compatible and it takes into account the informational advantage or superiority of an individual. Moreover, we showed by means of examples that the private value allocation yields sensible and reasonable outcomes in situations where any rational expectation equilibrium notion fails to do so. * Corresponding author 0304-4068/96/$15.00 0 1996 Elsevier Science S.A. Ah rights reserved SSDI 0304-4068(95)00724-5