Strictly Fair Allocations in Large Exchange Economies
AbstractIn this paper we introduce the concept of a strictly fair allocation and investigate the set of strictly fair allocations in large exchange economies. We prove that when agents' utility functions are differentiable, the set of strictly fair allocations coincides with the set of equal-income Walrasian equilibria. This is shown using both the "limit theorem" approach the "limit economy" approach. We also extend the analysis to economies that have both atoms and an atomless sector. These results substantially improve upon the existing characterizations of equal-income Walrasian equilibria in terms of both economic efficiency and economic equity.
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Bibliographic InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 972.
Length: 26 pages
Date of creation: Mar 1991
Date of revision:
Publication status: Published in Journal of Economic Theory (June 1992), 57(1): 160-175
Note: CFP 813.
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
Find related papers by JEL classification:
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
- D60 - Microeconomics - - Welfare Economics - - - General
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
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