A classification approach to Walrasian equilibrium with substitutability
AbstractIn exchange economies with indivisible objects, the substitutability of agents' preferences is essential for the guaranteed existence of Walrasian equilibrium. In this paper, we analyze the ranges of variation for agents' preferences that will guarantee the existence of equilibrium when some agents' preferences are known to satisfy the substitutability condition. Our approach is based on a classification result that partitions the set of economies into disjoint weak similarity classes such that whenever a weak similarity class contains an economy with an equilibrium, each economy in this class also has an equilibrium. The links among economies in the same weak similarity class are established with the notion of monotonization and tax systems.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 47945.
Date of creation: 02 Jul 2013
Date of revision:
Equilibrium; indivisibility; substitutability; free disposal; tax system.;
Find related papers by JEL classification:
- D5 - Microeconomics - - General Equilibrium and Disequilibrium
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
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