General equilibrium theory and increasing returns : an alternative to the survival assumption
AbstractExistence results for equilibria in economies under increasing returns to scale, fixed costs, or showing more general types of non convexity in the production sector, strongly rest on a crucial condition, known as the survival assumption. This assumption is unsatisfactory in the sense that it poses a condition on the set of production equilibria, an endogenous variable. We propose here conditions on the firms’ characteristics, notably on the firms' pricing behaviour, under which the equilibrium existence can be proved.
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Bibliographic InfoPaper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number b04017.
Length: 6 pages
Date of creation: Feb 2004
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General Equilibrium Theory; increasing returns; survival assumption.;
Find related papers by JEL classification:
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
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- Vohra, Rajiv, 1992. "Marginal Cost Pricing under Bounded Marginal Returns," Econometrica, Econometric Society, vol. 60(4), pages 859-76, July.
- Cornet, Bernard, 1988. "General equilibrium theory and increasing returns : Presentation," Journal of Mathematical Economics, Elsevier, vol. 17(2-3), pages 103-118, April.
- Guesnerie, Roger, 1975. "Pareto Optimality in Non-Convex Economies," Econometrica, Econometric Society, vol. 43(1), pages 1-29, January.
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