Characteristics of good and competitive equilibrium
AbstractWe analyse the consequences of a change of the characteristics of goods due to new information on the equilibrium of a pure exchange economy with n goods and m agents. Some changes of the characteristics of goods à la Lancaster have a positive effect on utility. In the general competitive equilibrium, some agents gain but others may lose. Nevertheless there is an increase of a linear combination of the utilities of the agents. The different possibilities of gains and losses are explicitly analysed in an example with two goods and two agents.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (REL - Recherches Economiques de Louvain) with number 2004035.
Date of creation: 01 Sep 2004
Date of revision:
Pure exchange economy; Characteristic of goods; Price determination; Pareto efficiency;
Other versions of this item:
- Gaumont Damien & Philippe Michel†, 2004. "Characteristics of good and competitive equilibrium," Recherches économiques de Louvain, De Boeck Université, vol. 70(3), pages 363-368.
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
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- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
- Luski, Israel & Wettstein, David, 1994. "The provision of public goods via advertising : Existence of equilibria and welfare analysis," Journal of Public Economics, Elsevier, vol. 54(2), pages 309-321, June.
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