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Minimal entropy and uniqueness of price equilibria in a pure exchange economy

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  • Loi, Andrea
  • Matta, Stefano

Abstract

We introduce uncertainty into a pure exchange economy and establish a connection between Shannon’s differential entropy and uniqueness of price equilibria. The following conjecture is proposed under the assumption of a uniform probability distribution: entropy is minimal if and only if the price is unique for every economy. We show the validity of this conjecture for an arbitrary number of goods and two consumers and, under certain conditions, for an arbitrary number of consumers and two goods.

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  • Loi, Andrea & Matta, Stefano, 2021. "Minimal entropy and uniqueness of price equilibria in a pure exchange economy," Journal of Mathematical Economics, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:mateco:v:97:y:2021:i:c:s030440682100118x
    DOI: 10.1016/j.jmateco.2021.102555
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    References listed on IDEAS

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    Cited by:

    1. Loi, Andrea & Matta, Stefano & Uccheddu, Daria, 2023. "Equilibrium selection under changes in endowments: A geometric approach," Journal of Mathematical Economics, Elsevier, vol. 108(C).
    2. Andrea Loi & Stefano Matta & Daria Uccheddu, 2023. "Uniqueness of equilibrium and redistributive policies: a geometric approach to efficiency," Papers 2308.03706, arXiv.org.
    3. Alexis Akira Toda & Kieran James Walsh, 2024. "Recent Advances on Uniqueness of Competitive Equilibrium," Papers 2402.00998, arXiv.org.

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