On economic efficiency under non-convexity
AbstractThis paper investigates economic efficiency under non-convexity. The analysis relies on a generalization of the separating hyperplane theorem under non-convexity. The concept of zero-maximality is used to characterize Pareto efficiency under non-convexity. We show the existence of a separating hypersurface that can be used to provide a dual characterization of efficient allocations. When the separating hypersurface is non-linear, this implies that non-linear pricing is an integral part of economic efficiency. Implications for the decentralization of economic decisions under non-convexity are discussed. Copyright Springer-Verlag 2012
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 50 (2012)
Issue (Month): 3 (August)
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Find related papers by JEL classification:
- C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
- D5 - Microeconomics - - General Equilibrium and Disequilibrium
- D6 - Microeconomics - - Welfare Economics
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