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Existence of Marginal Cost Pricing Equilibria in Economies with Several Nonconvex Firms

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  • Bonnisseau, Jean-Marc
  • Cornet, Bernard

Abstract

This paper considers a general equilibrium model of an economy where some firms may exhibit increasing returns to scale or more general types of nonconvexities. The firms are instructed to follow the standard marginal cost pricing rule or to fulfill the first-order necessary conditions for profit maximization. A general existence theorem of equilibria is proved in the case of an arbitrary number of firms. No assumption is made to imply the aggregate productive efficiency of equilibria, a condition that must be excluded in the nonconvex case. Copyright 1990 by The Econometric Society.

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  • Bonnisseau, Jean-Marc & Cornet, Bernard, 1990. "Existence of Marginal Cost Pricing Equilibria in Economies with Several Nonconvex Firms," Econometrica, Econometric Society, vol. 58(3), pages 661-682, May.
    • Handle: RePEc:ecm:emetrp:v:58:y:1990:i:3:p:661-82
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    1. Cuong Van & Frank Page & Myrna Wooders, 2007. "Risky arbitrage, asset prices, and externalities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(3), pages 475-491, December.
    2. Acurio Vásconez, Verónica & Giraud, Gaël & Mc Isaac, Florent & Pham, Ngoc-Sang, 2015. "The effects of oil price shocks in a new-Keynesian framework with capital accumulation," Energy Policy, Elsevier, vol. 86(C), pages 844-854.
    3. Jean-Marc Bonnisseau, 2000. "The Marginal Pricing Rule in Economies with Infinitely Many Commodities," Econometric Society World Congress 2000 Contributed Papers 0262, Econometric Society.
    4. Jean-Marc Bonnisseau & Matías Fuentes, 2018. "Market failures and equilibria in Banach lattices," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01960874, HAL.
    5. Bonnisseau, Jean-Marc & Meddeb, Moncef, 1999. "Existence of equilibria in economies with increasing returns and infinitely many commodities," Journal of Mathematical Economics, Elsevier, vol. 31(3), pages 287-307, April.
    6. J. M. Bonnisseau & A. Jamin, 2008. "Equilibria with Increasing Returns: Sufficient Conditions on Bounded Production Allocations," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(6), pages 1033-1068, December.
    7. Gaël Giraud & Cécile Renouard, 2011. "In search of an alternative to shareholder value maximization," Post-Print hal-00609153, HAL.
    8. Jean-Marc Bonnisseau & Matías Fuentes, 2020. "Market Failures and Equilibria in Banach Lattices: New Tangent and Normal Cones," Journal of Optimization Theory and Applications, Springer, vol. 184(2), pages 338-367, February.
    9. Hichem Ben-El-Mechaiekh & Philippe Bich & Monique Florenzano, 2009. "General equilibrium and fixed-point theory: a partial survey," PSE-Ecole d'économie de Paris (Postprint) hal-00755998, HAL.
    10. Fuentes, Matías N., 2011. "Existence of equilibria in economies with externalities and non-convexities in an infinite-dimensional commodity space," Journal of Mathematical Economics, Elsevier, vol. 47(6), pages 768-776.
    11. Kaplan, Todd R. & Wettstein, David, 1999. "Cost sharing: efficiency and implementation," Journal of Mathematical Economics, Elsevier, vol. 32(4), pages 489-502, December.
    12. Маракулин В.М., 2014. "О Договорном Подходе В Моделях Экономики Типа Эрроу-Дебре-Маккензи," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 50(1), pages 61-79, январь.
    13. David, Laurent & Le Breton, Michel & Merillon, Olivier, 2007. "Kolm as a Contributor to Public Utility Pricing, Second Best Culture and the Theory of Regulation," IDEI Working Papers 490, Institut d'Économie Industrielle (IDEI), Toulouse.
    14. van den Elzen, Antoon & Kremers, Hans, 2006. "An adjustment process for nonconvex production economies," Journal of Mathematical Economics, Elsevier, vol. 42(1), pages 1-13, February.
    15. Guoqiang Tian, 2016. "On the existence of price equilibrium in economies with excess demand functions," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 4(1), pages 5-16, April.

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