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Core equivalence and welfare properties without divisible goods

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  • Florig, Michael
  • Rivera, Jorge

Abstract

We study an economy where all goods entering preferences or production processes are indivisible. Fiat money not entering consumers' preferences is an additional perfectly divisible parameter. We establish a First and Second Welfare Theorem and a core equivalence result for the rationing equilibrium concept introduced in Florig and Rivera (2005a). The rationing equilibrium can be considered as a natural extension of the Walrasian notion when all goods are indivisible at the individual level but perfectly divisible at the level of the entire economy. As a Walras equilibrium with money is a special case of a rationing equilibrium, our results also hold for Walras equilibria with money.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:mateco:v:46:y:2010:i:4:p:467-474
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    References listed on IDEAS

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    1. Alexander Konovalov, 2005. "The core of an economy with satiation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 25(3), pages 711-719, April.
    2. Florig, Michael, 2001. "Hierarchic competitive equilibria," Journal of Mathematical Economics, Elsevier, vol. 35(4), pages 515-546, July.
    3. Shapley, Lloyd & Scarf, Herbert, 1974. "On cores and indivisibility," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 23-37, March.
    4. Mas-Colell, Andreu, 1977. "Indivisible commodities and general equilibrium theory," Journal of Economic Theory, Elsevier, vol. 16(2), pages 443-456, December.
    5. Broome, John, 1972. "Approximate equilibrium in economies with indivisible commodities," Journal of Economic Theory, Elsevier, vol. 5(2), pages 224-249, October.
    6. Ali Khan, M. & Yamazaki, Akira, 1981. "On the cores of economies with indivisible commodities and a continuum of traders," Journal of Economic Theory, Elsevier, vol. 24(2), pages 218-225, April.
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    1. repec:eee:mateco:v:72:y:2017:i:c:p:145-153 is not listed on IDEAS

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