Walras Equilibrium with Coordination
AbstractWe consider a pure exchange economy with private ownership in which consumers have interdependent preferences. Hence, consumers’ preferences are defined on the states of the economy. In a Walras equilibrium for such an economy, it may, of course, be possible for two or more consumers to simultaneously change their net trades and thereby obtain a preferred state.We use the concept of coordination introduced by Vind (1983) to define an exogenously given coordination structure in the economy and define a new equilibrium concept, Walras equilibrium with coordination. In such an equilibrium individual consumers take prices and initial endowments as given, and consumers do not expect to be able to obtain a preferred state when they coordinate their choise of net trades. By using the existence theorem for an equilibrium in a social system with oordination, we set conditions for the existence of a Walras equilibrium with coordination.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 00-18.
Length: 15 pages
Date of creation: Sep 2000
Date of revision:
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Walras Equilibrium with Coordination; Coordination; Social System; Households; Incomplete Markets;
Find related papers by JEL classification:
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-10-29 (All new papers)
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