Nizar Allouch () (Department of Economics Queen Mary, University of London Mile End Rd, E1 4NS London, United Kingdom) Cuong Le Van () (PSE, Université Paris 1, CNRS CES, 106-112 boulevard de l'Hôpital 75647 Paris cedex 13)
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The main contribution of the paper is to provide a weaker nonsatiation assumption than the one commonly used in the literature to ensure the existence of competitive equilibrium. Our assumption allows for satiation points in the set of individually feasible consumptions, provided that the consumer has satiation points available to him outside this set. As a result, we show the concept of equilibrium with dividends (See Aumann and Dreze (1986), Mas-Collel (1992)) is pertinent only when the set of satiation points is included in the set of individually feasible consumptions. Our economic motivation stems from the fact that in decentralized markets, increasing the incomes of consumers through dividends, if it is possible, is costly since it involves the intervention of a social planner. Then, we show, in particular, how in securities markets our weak nonsatiation assumption is satisfied by Werner's (1987) assumption.
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Paper provided by Development and Policies Research Center (DEPOCEN), Vietnam in its series Working Papers with number
08.
Find related papers by JEL classification: D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
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