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Non-Atomic Economies and the Boundaries of Perfect Competition

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  • Joseph M. Ostroy

    (UCLA)

  • William R. Zame

    (UCLA)

Abstract

The distinction between nonatomicity and thick markets as the source of perfect competition is examined. The authors construct a model of an imperfectly competitive economy with a nonatomic continuum of traders and a continuum of differentiated commodities for which Walrasian equilibria exist. The failure of perfect competition is identified in two ways: individuals can affect prices and the core is strictly larger than the set of Walrasian allocations. By contrast, it is shown that, when markets are physically or economically thick (or both), then individuals cannot typically affect prices and the core always coincides with the set of Walrasian allocations. Copyright 1994 by The Econometric Society.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Joseph M. Ostroy & William R. Zame, 1991. "Non-Atomic Economies and the Boundaries of Perfect Competition," UCLA Economics Working Papers 502R, UCLA Department of Economics.
  • Handle: RePEc:cla:uclawp:502r
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    File URL: http://www.econ.ucla.edu/workingpapers/wp502R.pdf
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    References listed on IDEAS

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    Cited by:

    1. Makowski, L. & Ostroy, J.M., 1991. "The Margin of Appropriation and an Extension of the First Theorem of Welfare Economics," Papers 388, California Davis - Institute of Governmental Affairs.
    2. Courtney LaFountain, 2008. "Core equivalence for residential land use models," International Journal of Economic Theory, The International Society for Economic Theory, vol. 4(4), pages 459-481.
    3. Bernard Cornet & V. F. Martins-Da-Rocha, 2005. "Fatou¡¯S Lemma For Unbounded Gelfand Integrable Mappings," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 200503, University of Kansas, Department of Economics, revised Feb 2005.
    4. Suzuki, Takashi, 2013. "Core and competitive equilibria of a coalitional exchange economy with infinite time horizon," Journal of Mathematical Economics, Elsevier, vol. 49(3), pages 234-244.
    5. Hervés-Beloso, Carlos & Moreno-Garci­a, Emma, 2008. "Competitive equilibria and the grand coalition," Journal of Mathematical Economics, Elsevier, vol. 44(7-8), pages 697-706, July.
    6. Gretsky, Neil E. & Ostroy, Joseph M. & Zame, William R., 1999. "Perfect Competition in the Continuous Assignment Model," Journal of Economic Theory, Elsevier, vol. 88(1), pages 60-118, September.
    7. Herves-Beloso, Carlos & Moreno-Garcia, Emma & Nunez-Sanz, Carmelo & Rui Pascoa, Mario, 2000. "Blocking Efficacy of Small Coalitions in Myopic Economies," Journal of Economic Theory, Elsevier, vol. 93(1), pages 72-86, July.
    8. Monteiro, P. K. & Araújo, Aloísio Pessoa de & Martins-da-Rocha, Victor Filipe, 2003. "Equilibria in security markets with a continuum of agents," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 513, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    9. Podczeck, K., 2005. "On core-Walras equivalence in Banach lattices," Journal of Mathematical Economics, Elsevier, vol. 41(6), pages 764-792, September.
    10. Konrad Podczeck, 2003. "Note on the Core-Walras Equivalence Problem when the Commodity Space is a Banach Lattice," Vienna Economics Papers 0307, University of Vienna, Department of Economics.
    11. Podczeck, K., 2004. "On Core-Walras equivalence in Banach spaces when feasibility is defined by the Pettis integral," Journal of Mathematical Economics, Elsevier, vol. 40(3-4), pages 429-463, June.
    12. Green, Edward J. & Zhou, Ruilin, 2010. "Perfectly competitive bilateral exchange without discounting," Journal of Monetary Economics, Elsevier, vol. 57(2), pages 121-131, March.
    13. Hervés Beloso, Carlos & Moreno García, Emma, 1996. "Coaliciones y competencia perfecta," DE - Documentos de Trabajo. Economía. DE 3362, Universidad Carlos III de Madrid. Departamento de Economía.
    14. Jose S. Penalva Zuasti, 2001. "Insurance with Frequency Trading: A Dynamic Analysis of Efficient Insurance Markets," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(4), pages 790-822, October.
    15. Campion, Maria J. & Candeal, Juan C. & Indurain, Esteban, 2006. "The existence of utility functions for weakly continuous preferences on a Banach space," Mathematical Social Sciences, Elsevier, vol. 51(2), pages 227-237, March.
    16. Konrad Podczeck, 2003. "On Core-Walras Equivalence in Banach Spaces when Feasibility is defined by the Pettis Integral," Vienna Economics Papers 0403, University of Vienna, Department of Economics.
    17. Moreno García, Emma & Hervés Beloso, Carlos, 1996. "Algunas consideraciones sobre el mecanismo del veto," DE - Documentos de Trabajo. Economía. DE 3374, Universidad Carlos III de Madrid. Departamento de Economía.
    18. Javier Hervés-Estévez & Emma Moreno-García, 2015. "On restricted bargaining sets," International Journal of Game Theory, Springer;Game Theory Society, vol. 44(3), pages 631-645, August.
    19. repec:dau:papers:123456789/6273 is not listed on IDEAS
    20. repec:eee:mateco:v:73:y:2017:i:c:p:54-67 is not listed on IDEAS
    21. Hervés-Estévez, Javier & Moreno-García, Emma, 2012. "Some remarks on restricted bargaining sets," MPRA Paper 39385, University Library of Munich, Germany, revised 10 Jun 2012.

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