Free disposal, monotonicity and equilibrium
AbstractThis paper studies the effect of free disposal on the existence of Walrasian equilibrium for exchange economies with indivisible objects. It is shown that allowing an agent to enjoy free disposal has the same effect for generating an equilibrium (or eliminating existing equilibria) as allowing every agent to enjoy free disposal. A new equilibrium existence theorem is given to show how this observation can enhance the existence results by Kelso and Crawford (1982) and Sun and Yang (2006).
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 42585.
Date of creation: 13 Nov 2012
Date of revision:
Indivisibility; equilibrium; free disposal; monotonic cover;
Find related papers by JEL classification:
- D5 - Microeconomics - - General Equilibrium and Disequilibrium
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-24 (All new papers)
- NEP-GTH-2012-11-24 (Game Theory)
- NEP-MIC-2012-11-24 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gul, Faruk & Stacchetti, Ennio, 1999. "Walrasian Equilibrium with Gross Substitutes," Journal of Economic Theory, Elsevier, vol. 87(1), pages 95-124, July.
- Jinpeng Ma, 1998. "Competitive Equilibrium with Indivisibilities," Departmental Working Papers 199809, Rutgers University, Department of Economics.
- Bikhchandani, Sushil & Mamer, John W., 1997. "Competitive Equilibrium in an Exchange Economy with Indivisibilities," Journal of Economic Theory, Elsevier, vol. 74(2), pages 385-413, June.
- Ma, Jinpeng, 1998. "Competitive Equilibrium with Indivisibilities," Journal of Economic Theory, Elsevier, vol. 82(2), pages 458-468, October.
- Ning Sun & Zaifu Yang, 2006. "Equilibria and Indivisibilities: Gross Substitutes and Complements," Econometrica, Econometric Society, vol. 74(5), pages 1385-1402, 09.
- Kelso, Alexander S, Jr & Crawford, Vincent P, 1982. "Job Matching, Coalition Formation, and Gross Substitutes," Econometrica, Econometric Society, vol. 50(6), pages 1483-1504, November.
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