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Existence of Equilibrium for Integer Allocation Problems

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Author Info
Somdeb Lahiri () (CAFS IFMR)

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Abstract

In this paper we show that if all agents are equipped with well-behaved discrete concave production functions, then a feasible price allocation pair is a market equilibrium if and only if it solves a linear programming problem. Using this result we are able to obtain a necessary and sufficient condition for existence that requires an equilibrium price vector to satisfy finitely many inequalities. A necessary and sufficient condition for the existence of market equilibrium when the maximum value function is Weakly Monotonic at the initial endowment that follows from our results is that the maximum value function is partially concave at the initial endowment. We also provide a discussion of the results and an alternative solution concept. The alternative solution concept is however, informationally and computationally inefficient.

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File URL: http://repec.org/sce2006/up.12781.1135589227.pdf
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Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2006 with number 8.

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Date of creation: 04 Jul 2006
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Handle: RePEc:sce:scecfa:8

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Related research
Keywords: existence; market equilibrium; discrete concave; linear programming;

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References listed on IDEAS
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  1. Shapley, Lloyd S. & Shubik, Martin, 1969. "On market games," Journal of Economic Theory, Elsevier, vol. 1(1), pages 9-25, June. [Downloadable!] (restricted)
  2. Peter R. Wurman & Michael P. Wellman, 1999. "Equilibrium Prices in Bundle Auctions," Working Papers 99-09-064, Santa Fe Institute.
  3. Zaifu YANG & Ning SUN, 2004. "The Max-Convolution Approach to Equilibrium Models with Indivisibilities," Econometric Society 2004 Far Eastern Meetings 564, Econometric Society.
  4. Somdeb Lahiri, 2005. "Manipulation via Endowments in a Market with Profit Maximizing Agents," Game Theory and Information 0511008, EconWPA. [Downloadable!]
  5. Bikhchandani, Sushil & Ostroy, Joseph M., 2002. "The Package Assignment Model," Journal of Economic Theory, Elsevier, vol. 107(2), pages 377-406, December. [Downloadable!] (restricted)
  6. Zaifu Yang, 2001. "A Practical Competitive Market Model for Indivisible Commo," Cowles Foundation Discussion Papers 1317, Cowles Foundation, Yale University. [Downloadable!]
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