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Universality and Efficiency of Price Mechanism based on an Expansion Possibility of Economies

Author

Listed:
  • Kohzo Shiraishi

    (Faculty of Economics, Kobegakuin University)

  • Ken Urai

    (Graduate School of Economics, Osaka University)

  • Hiromi Murakami

    (Graduate School of Economics, Osaka University)

Abstract

In this paper, we axiomatically characterize the universality and efficiency of price mechanism based on an expansion possibility of economic environments like trading opportunities, immigrants, agents' consumption sets through the cultural globalization, and so on. Together with some generalized settings like economy dependent message-response structure, we base our argument on the framework of Sonnenschein (1974). In Sonnenschein (1974), the price mechanism is characterized in more specific way than that of Hurwicz (1960), Mount and Reiter (1974), etc. for the informational efficiency problem. His model, however, has an advantage to describe the universality and efficiency of the price mechanism from the category-theoretic viewpoint through the basic economic tool of the excess demand function. His approach also enables us to characterize the price mechanism through cooperative game theoretic settings like the core quivalence that is closely related to the replica stability axiom of social choice settings like Thomson (1988) and Nagahisa (1994).

Suggested Citation

  • Kohzo Shiraishi & Ken Urai & Hiromi Murakami, 2016. "Universality and Efficiency of Price Mechanism based on an Expansion Possibility of Economies," Discussion Papers in Economics and Business 16-10, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1610
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    References listed on IDEAS

    as
    1. Jordan, J. S., 1982. "The competitive allocation process is informationally efficient uniquely," Journal of Economic Theory, Elsevier, vol. 28(1), pages 1-18, October.
    2. Thomson, William, 1988. "A study of choice correspondences in economies with a variable number of agents," Journal of Economic Theory, Elsevier, vol. 46(2), pages 237-254, December.
    3. Hiromi Murakami & Ken Urai, 2016. "Replica Core Limit Theorem for Economy with Satiation," Discussion Papers in Economics and Business 16-09, Osaka University, Graduate School of Economics.
    4. Mount, Kenneth & Reiter, Stanley, 1974. "The informational size of message spaces," Journal of Economic Theory, Elsevier, vol. 8(2), pages 161-192, June.
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    7. Osana, Hiroaki, 1978. "On the informational size of message spaces for resource allocation processes," Journal of Economic Theory, Elsevier, vol. 17(1), pages 66-78, February.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Price Mechanism; Axiomatic Characterization; Informational Efficiency; Universality; Mes- sage Mechanism; Cultural Globalization;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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