Core equivalence and welfare properties without divisible goods
AbstractWe study an economy where all goods entering preferences or production processes are indivisible. Fiat money not entering consumers' preferences is an additional perfectly divisible parameter. We establish a First and Second Welfare Theorem and a core equivalence result for the rationing equilibrium concept introduced in Florig and Rivera (2005a). The rationing equilibrium can be considered as a natural extension of the Walrasian notion when all goods are indivisible at the individual level but perfectly divisible at the level of the entire economy. As a Walras equilibrium with money is a special case of a rationing equilibrium, our results also hold for Walras equilibria with money.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Mathematical Economics.
Volume (Year): 46 (2010)
Issue (Month): 4 (July)
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Web page: http://www.elsevier.com/locate/jmateco
Indivisible goods Competitive equilibrium Pareto optimum Core;
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