# What's the underlying idea of definition of constrained market in Skiadas' Asset Pricing Theory?

I'm self-studying Skiadas' Asset Pricing Theory, and find the definition of constrained market on page 21 confusing(you can find it here in the sample chapter).

Deﬁnition 1.26. A constrained market is a closed convex set of cash ﬂows $X \subseteq \Bbb R^{1+K}$ such that $0 \in X$ and for some $\epsilon > 0$,

$x \in X$ and $0 < \| x \| <\epsilon$ implies $\frac{\epsilon}{\| x \|}x \in X.$

I know this definition renders missing market and short-sale constraints as special cases, but the underlying idea of this formulation still eludes me.

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Thank you.${}{}{}{}$ –  Bender Mar 7 '14 at 20:38