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Lone wolves in competitive equilibria

Author

Listed:
  • Ravi Jagadeesan

    (Harvard Business School, Baker Library
    Department of Economics, Harvard University, Littauer Center)

  • Scott Duke Kominers

    (Department of Economics, Harvard University, Littauer Center
    Entrepreneurial Management Unit, Harvard Business School, Rock Center, Soldiers Field
    Harvard University
    National Bureau of Economic Research)

  • Ross Rheingans-Yoo

    (Harvard University)

Abstract

This paper develops a class of equilibrium-independent predictions of competitive equilibrium with indivisibilities. Specifically, we prove an analogue of the “Lone Wolf Theorem” of classical matching theory for the Baldwin and Klemperer (Econometrica 87(3):867–932, 2019) model of exchange economies with transferable utility, showing that any agent who does not participate in trade in some competitive equilibrium must receive her autarky payoff in every competitive equilibrium. Our results extend to approximate equilibria and to settings in which utility is only approximately transferable.

Suggested Citation

  • Ravi Jagadeesan & Scott Duke Kominers & Ross Rheingans-Yoo, 2020. "Lone wolves in competitive equilibria," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(2), pages 215-228, August.
    • Handle: RePEc:spr:sochwe:v:55:y:2020:i:2:d:10.1007_s00355-019-01228-z
    DOI: 10.1007/s00355-019-01228-z
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    References listed on IDEAS

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    Cited by:

    1. Elizabeth Baldwin & Omer Edhan & Ravi Jagadeesan & Paul Klemperer & Alexander Teytelboym, 2020. "The Equilibrium Existence Duality: Equilibrium with Indivisibilities & Income Effects," Papers 2006.16939, arXiv.org.

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