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Competitive equilibrium and indivisibles

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  • Luciano Méndez Naya

    (Universidade de Santiago de Compostela)

Abstract

This paper studies the existence of competitive equilibrium in markets with indivisibles. The basis of the paper is a theorem that relates the existence of equilibrium to the core of certain associated cooperative games. From this result, we obtain a significant improvement on a classical result in this literature. We then characterize the existence of equilibrium in a two-agent three-good economy, showing that, in this particular context, the existence of equilibrium is more likely when goods are complements than when they are substitutes.

Suggested Citation

  • Luciano Méndez Naya, 2026. "Competitive equilibrium and indivisibles," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 73(1), pages 1-22, June.
    • Handle: RePEc:spr:inrvec:v:73:y:2026:i:1:d:10.1007_s12232-026-00524-2
    DOI: 10.1007/s12232-026-00524-2
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    References listed on IDEAS

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    1. Ma, Jinpeng, 1998. "Competitive Equilibrium with Indivisibilities," Journal of Economic Theory, Elsevier, vol. 82(2), pages 458-468, October.
    2. Lloyd S. Shapley, 1967. "On balanced sets and cores," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 14(4), pages 453-460.
    3. Ning Sun & Zaifu Yang, 2006. "Equilibria and Indivisibilities: Gross Substitutes and Complements," Econometrica, Econometric Society, vol. 74(5), pages 1385-1402, September.
    4. Satoru Fujishige & Zaifu Yang, 2003. "A Note on Kelso and Crawford's Gross Substitutes Condition," Mathematics of Operations Research, INFORMS, vol. 28(3), pages 463-469, August.
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