Yasar N. Barut (Department of Economics, Rice University, Houston, TX 77005, USA)
Abstract
We prove the existence and efficiency of equilibrium in economies with infinitely many consumers in which there are finitely many agents who own a positive portion of the aggregate endowment. We prove existence for commodity spaces which are employed in the general equilibrium asset pricing models and use incomplete and intransitive preferences. We discuss the importance of existence of finitely many agents who own a positive portion of the aggregate endowment in obtaining efficient equilibrium. For general equilibrium asset pricing applications we require forward properness only at individually rational Pareto optimal allocations. We provide an Arrow-Debreu model for these economies. We also give an application of our approach and results by employing Stochastic Differential Utility as the utility of each consumer in an infinite horizon model.
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Article provided by Springer in its journal Economic Theory.
Find related papers by JEL classification: D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies C62 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Existence and Stability Conditions of Equilibrium