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Marginal pricing equilibrium with externalities in Riesz spaces

Author

Listed:
  • Jean-Marc Bonnisseau

    (Paris School of Economics, Université Paris 1 Panthéon-Sorbonne, Centre d’Economie de la Sorbonne)

  • Matías Fuentes

    (Universidad Autónoma de Madrid)

Abstract

The purpose of this paper is to prove the existence of a marginal pricing economic equilibrium in presence of increasing returns and externalities in a commodity space general enough as to encompass the vast majority of economic situations. This extends the existing literature on competitive equilibria in vector lattices by incorporating market failures, and it also generalises several non-competitive existence results to a larger class of commodity spaces. The key features are a suitable definition for the marginal pricing rule and an adaptation of the properness condition.

Suggested Citation

  • Jean-Marc Bonnisseau & Matías Fuentes, 2024. "Marginal pricing equilibrium with externalities in Riesz spaces," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 78(1), pages 1-27, August.
    • Handle: RePEc:spr:joecth:v:78:y:2024:i:1:d:10.1007_s00199-023-01524-x
    DOI: 10.1007/s00199-023-01524-x
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    References listed on IDEAS

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    1. Bonnisseau, Jean-Marc & Cornet, Bernard, 1988. "Valuation equilibrium and pareto optimum in non-convex economies," Journal of Mathematical Economics, Elsevier, vol. 17(2-3), pages 293-308, April.
    2. Jones, Larry E, 1984. "A Competitive Model of Commodity Differentiation," Econometrica, Econometric Society, vol. 52(2), pages 507-530, March.
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    4. 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.
    5. 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.
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    7. Podczeck, Konrad, 1996. "Equilibria in vector lattices without ordered preferences or uniform properness," Journal of Mathematical Economics, Elsevier, vol. 25(4), pages 465-485.
    8. 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.
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    Cited by:

    1. Cuong Le Van & Ngoc-Sang Pham, 2025. "Equilibrium with non-convex preferences: some insights," Papers 2503.16890, arXiv.org.

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    More about this item

    Keywords

    Riesz space; Marginal pricing rule; Non-competitive equilibrium; $$sigma $$ σ -Locally $$tau $$ τ -Uniform properness or Properness condition;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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