Before revision:  A motivating application is the extension of asset pricing theory to incorporate ambiguity about volatility and possibility. The paper provides some initial steps in this direction by deriving equilibrium relations for asset returns in a representative agent framework, by deriving hedging bounds for asset prices, and by showing the pivotal role of `state prices' in both the equilibrium and no-arbitrage analyses .
After revision:  A motivating application is the extension of asset pricing theory to incorporate ambiguity about volatility leads invariably to a set of nonequivalent priors, that is, to priors that disagree about which scenarios are possible .