For agents with identical homothetic preferences (but possibly different endowments), aggregate excess demand can be derived from maximization of a utility function of a representative agent whose endowment is the sum of the individual's endowments. Such an economy has a unique equilibrium. In this paper, a metric p is defined on the set P of preference relations representable by CES utility functions. It is then shown that there are agentswhose preference relations in P are arbitrarily close to one another in t he metric p, and there are endowments for these agents, such that the resulting exchange economy has a multiple Walrasian equilibria.
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Paper provided by Minnesota - Center for Economic Research in its series Papers with number
288.
Length: 26 pages Date of creation: 1996 Date of revision: Handle: RePEc:fth:minner:288
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Find related papers by JEL classification: D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
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