Buying Several Indivisible Goods
This paper studies economies where agents exchange indivisible goods and money. Agents have potential use for all indivisible goods and the indivisible goods are differentiated. We assume that agents have quasi-linear utilities in money, have sufficient money endowments to afford any group of objects priced below their reservation values, have reservation values which are submodular and satisfy the Cardinality Condition. This Cardinality Condition requires that for each agent the marginal utility of an object only depends on the number of objects to which it is added, not on their characteristics. Under these assumptions, we show that the set of competitive equilibrium prices is a non empty lattice and that, in any equilibrium, the price of an object is between the social value of the object and its value in its second best use.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: University of California Davis - Department of Economics. One Shields Ave., California 95616-8578|
Phone: (530) 752-0741
Fax: (530) 752-9382
Web page: http://www.econ.ucdavis.edu/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Henry, Claude, 1970. "Indivisibilites dans une Economie d'Echanges. (With English summary.)," Econometrica, Econometric Society, vol. 38(3), pages 542-58, May.
- Kaneko, Mamoru & Yamamoto, Yoshitsugu, 1986. "The existence and computation of competitive equilibria in markets with an indivisible commodity," Journal of Economic Theory, Elsevier, vol. 38(1), pages 118-136, February.
- Mamoru Kaneko, 1980.
"The Central Assignment Game and the Assignment Markets,"
Cowles Foundation Discussion Papers
563, Cowles Foundation for Research in Economics, Yale University.
- Kaneko, Mamoru, 1982. "The central assignment game and the assignment markets," Journal of Mathematical Economics, Elsevier, vol. 10(2-3), pages 205-232, September.
- Bikhchandani, Sushil & Mamer, John W., 1997. "Competitive Equilibrium in an Exchange Economy with Indivisibilities," Journal of Economic Theory, Elsevier, vol. 74(2), pages 385-413, June.
- Kelso, Alexander S, Jr & Crawford, Vincent P, 1982. "Job Matching, Coalition Formation, and Gross Substitutes," Econometrica, Econometric Society, vol. 50(6), pages 1483-1504, November.
When requesting a correction, please mention this item's handle: RePEc:fth:caldec:97-20. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel)
If references are entirely missing, you can add them using this form.