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Walrasian equilibrium as limit of competitive equilibria without divisible goods

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  • Michael Florig
  • Jorge Rivera

Abstract

This paper investigates the limit properties of a sequence of competitive outcomes existing for economies where all commodities are indivisible, as indivisibility vanishes. The nature of this limit depends on whether the “strong survival assumption” is assumed or not in the limit economy, a standard convex economy. If this condition holds, then the equilibrium sequence converges to a Walras equilibrium for the convex economy; otherwise it converges to a hierarchic equilibrium, a competitive outcome existing in this economy despite the fact that a Walras equilibrium might not exist.

Suggested Citation

  • Michael Florig & Jorge Rivera, 2017. "Walrasian equilibrium as limit of competitive equilibria without divisible goods," Working Papers wp451, University of Chile, Department of Economics.
    • Handle: RePEc:udc:wpaper:wp451
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    References listed on IDEAS

    as
    1. Kajii, Atsushi, 1996. "How to discard non-satiation and free-disposal with paper money," Journal of Mathematical Economics, Elsevier, vol. 25(1), pages 75-84.
    2. Florig, Michael, 2001. "Hierarchic competitive equilibria," Journal of Mathematical Economics, Elsevier, vol. 35(4), pages 515-546, July.
    3. Artstein, Zvi, 1979. "A note on fatou's lemma in several dimensions," Journal of Mathematical Economics, Elsevier, vol. 6(3), pages 277-282, December.
    4. Danilov, V. I. & Sotskov, A. I., 1990. "A generalized economic equilibrium," Journal of Mathematical Economics, Elsevier, vol. 19(4), pages 341-356.
    5. Florig, Michael & Rivera, Jorge, 2010. "Core equivalence and welfare properties without divisible goods," Journal of Mathematical Economics, Elsevier, vol. 46(4), pages 467-474, July.
    6. Florig, Michael & Rivera, Jorge, 2017. "Existence of a competitive equilibrium when all goods are indivisible," Journal of Mathematical Economics, Elsevier, vol. 72(C), pages 145-153.
    7. Michael Florig, 2003. "Arbitrary small indivisibilities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(4), pages 831-843, November.
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