Buying Several Indivisible Goods
AbstractThis paper studies economies where agents exchange indivisible goods and money. Agents have potential use for all indivisible goods and the indivisible goods are differentiated. We assume that agents have quasi-linear utilities in money, have sufficient money endowments to afford any group of objects priced below their reservation values, have reservation values which are submodular and satisfy the Cardinality Condition. This Cardinality Condition requires that for each agent the marginal utility of an object only depends on the number of objects to which it is added, not on their characteristics. Under these assumptions, we show that the set of competitive equilibrium prices is a non empty lattice and that, in any equilibrium, the price of an object is between the social value of the object and its value in its second best use.
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Bibliographic InfoPaper provided by University of California, Davis, Department of Economics in its series Working Papers with number 9720.
Date of creation: 09 Jan 2003
Date of revision:
Other versions of this item:
- Carmen BeviÃ¡ Baeza & JosÃ© Angel Silva Reus, 1997. "Buying several indivisible goods," Working Papers. Serie AD, Instituto Valenciano de Investigaciones EconÃ³micas, S.A. (Ivie) 1997-27, Instituto Valenciano de Investigaciones EconÃ³micas, S.A. (Ivie).
- Carmen Bevia & Martine Quinzii & JosÅ½ A. Silva, . "Buying Several Indivisible Goods," Department of Economics, California Davis - Department of Economics 97-20, California Davis - Department of Economics.
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- Kaneko, Mamoru & Yamamoto, Yoshitsugu, 1986. "The existence and computation of competitive equilibria in markets with an indivisible commodity," Journal of Economic Theory, Elsevier, vol. 38(1), pages 118-136, February.
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- Kelso, Alexander S, Jr & Crawford, Vincent P, 1982. "Job Matching, Coalition Formation, and Gross Substitutes," Econometrica, Econometric Society, Econometric Society, vol. 50(6), pages 1483-1504, November.
- Bikhchandani, Sushil & Mamer, John W., 1997. "Competitive Equilibrium in an Exchange Economy with Indivisibilities," Journal of Economic Theory, Elsevier, vol. 74(2), pages 385-413, June.
- Henry, Claude, 1970. "Indivisibilites dans une Economie d'Echanges. (With English summary.)," Econometrica, Econometric Society, Econometric Society, vol. 38(3), pages 542-58, May.
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