Abstract： 

In this paper, we extend the concept of rationalexpectations equilibrium, from a traditional singlebelief framework to a multibelief one. In the traditional framework of single belief, agents are supposed to know the equilibrium price “correctly.” We relax this requirement in the framework of multiple beliefs. While agents do not have to know the equilibrium price exactly, they must be correct in that it must be always contained in the support of each probability distribution they think possible. We call this equilibrium concept a multibelief rationalexpectations equilibrium. We then show that such an equilibrium exists, that indeterminacy and complexity of equilibria can happen even when the degree of risk aversion is moderate and, in particular, that a decreasing price sequence can be an equilibrium.
The last property is highlighted in a linearutility example where any decreasing price sequence is a multibelief rationalexpectations equilibrium while only possible singlebelief rationalexpectations equilibrium price sequences are those which are constant over time. 