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Walras and dividends equilibrium with possibly satiated consumers

Author

Listed:
  • Nizar Allouch

    (Department of Economics Queen Mary, University of London Mile End Rd, E1 4NS London, United Kingdom)

  • Cuong Le Van

    (PSE, Université Paris 1, CNRS CES, 106-112 boulevard de l'Hôpital 75647 Paris cedex 13)

Abstract

The main contribution of the paper is to provide a weaker nonsatiation assumption than the one commonly used in the literature to ensure the existence of competitive equilibrium. Our assumption allows for satiation points in the set of individually feasible consumptions, provided that the consumer has satiation points available to him outside this set. As a result, we show the concept of equilibrium with dividends (See Aumann and Dreze (1986), Mas-Collel (1992)) is pertinent only when the set of satiation points is included in the set of individually feasible consumptions. Our economic motivation stems from the fact that in decentralized markets, increasing the incomes of consumers through dividends, if it is possible, is costly since it involves the intervention of a social planner. Then, we show, in particular, how in securities markets our weak nonsatiation assumption is satisfied by Werner's (1987) assumption.

Suggested Citation

  • Nizar Allouch & Cuong Le Van, 2008. "Walras and dividends equilibrium with possibly satiated consumers," Working Papers 26, Development and Policies Research Center (DEPOCEN), Vietnam.
    • Handle: RePEc:dpc:wpaper:0808
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    Cited by:

    1. Martins-da-Rocha, V. Filipe & Monteiro, Paulo K., 2009. "Unbounded exchange economies with satiation: How far can we go?," Journal of Mathematical Economics, Elsevier, vol. 45(7-8), pages 465-478, July.
    2. repec:ebl:ecbull:v:3:y:2008:i:73:p:1-8 is not listed on IDEAS
    3. Won, Dong Chul & Yannelis, Nicholas C., 2008. "Equilibrium theory with unbounded consumption sets and non-ordered preferences: Part I. Non-satiation," Journal of Mathematical Economics, Elsevier, vol. 44(11), pages 1266-1283, December.
    4. Miyazaki, Kentaro & 宮崎, 健太郎 & Takekuma, Shin-Ichi & 武隈, 愼一, 2012. "On the existence of Walras equilibrium in irreducible economies with satiable and non-ordered preferences," Discussion Papers 2012-05, Graduate School of Economics, Hitotsubashi University.
    5. Jean-Michel Grandmont, 2013. "Tribute to Cuong Le Van," International Journal of Economic Theory, The International Society for Economic Theory, vol. 9(1), pages 5-10, March.
    6. Battauz, Anna & De Donno, Marzia & Ortu, Fulvio, 2011. "Intertemporal asset pricing and the marginal utility of wealth," Journal of Mathematical Economics, Elsevier, vol. 47(2), pages 227-244, March.
    7. Guangsug Hahn & Dong Chul Won, 2009. "Satiation and Equilibrium in Unbounded Exchange Economies," Korean Economic Review, Korean Economic Association, vol. 25, pages 349-366.
    8. Sato Norihisa, 2010. "Existence of Competitive Equilibrium in Unbounded Exchange Economies with Satiation: A Note," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-22, July.
    9. Sato, Norihisa, 2010. "Satiation and existence of competitive equilibrium," Journal of Mathematical Economics, Elsevier, vol. 46(4), pages 534-551, July.
    10. Norihisa Sato, 2008. "Some sufficient conditions for the existence of a competitive equilibrium in economies with satiated consumers," Economics Bulletin, AccessEcon, vol. 3(73), pages 1-8.

    More about this item

    Keywords

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    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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