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Nash-walras Equilibria of a Large Economy

Author

Listed:
  • Enrico Minelli

    (Dipartimento di Scienze Economiche - UniBs - Università degli Studi di Brescia = University of Brescia)

  • Heracles M. Polemarchakis

    (CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain = Catholic University of Louvain)

Abstract

Individuals exchange contracts for the delivery of commodities in competitive markets and, simultaneously, act strategically; actions affect utilities across individuals directly or through the payoffs of contracts. This encompasses economies with asymmetric information. Nash - walras equilibria exist for large economies, even if utility functions are not quasi - concave and choice sets are not convex, which is the case in standard settings; the separation of the purchase from the sale of contracts and the pooling of the deliveries on contracts guarantee that the markets for commodities clear.

Suggested Citation

  • Enrico Minelli & Heracles M. Polemarchakis, 1999. "Nash-walras Equilibria of a Large Economy," Working Papers hal-00601580, HAL.
    • Handle: RePEc:hal:wpaper:hal-00601580
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    References listed on IDEAS

    as
    1. Hart, Sergiu & Hildenbrand, Werner & Kohlberg, Elon, 1974. "On equilibrium allocations as distributions on the commodity space," Journal of Mathematical Economics, Elsevier, vol. 1(2), pages 159-166, August.
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    5. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    6. Bisin, A. & Geanakoplos, J.D. & Gottardi, P. & Minelli, E. & Polemarchakis, H., 2011. "Markets and contracts," Journal of Mathematical Economics, Elsevier, vol. 47(3), pages 279-288.
    7. Pradeep Dubey & John Geanakoplos & Martin Shubik, 1988. "Default and Efficiency in a General Equilibrium Model with Incomplete Markets," Cowles Foundation Discussion Papers 879R, Cowles Foundation for Research in Economics, Yale University, revised Feb 1989.
    8. Douglas Gale, 1992. "A Walrasian Theory of Markets with Adverse Selection," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(2), pages 229-255.
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    Citations

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    Cited by:

    1. Joao Correia-da-Silva, 2009. "Uncertain delivery in markets for lemons," FEP Working Papers 310, Universidade do Porto, Faculdade de Economia do Porto.
    2. CITANNA, Alessandro, 2000. "Moral hazard and linear contracts : Economies with idiosyncratic risks," HEC Research Papers Series 699, HEC Paris.
    3. Correia-da-Silva, João, 2012. "General equilibrium in markets for lemons," Journal of Mathematical Economics, Elsevier, vol. 48(3), pages 187-195.
    4. Joao Correia-da-Silva & Carlos Herves-Beloso, 2008. "General equilibrium with private state verification," Levine's Working Paper Archive 814577000000000024, David K. Levine.
    5. CITANNA, Alessandro, 2000. "Proportional transaction costs on asset trades : a note on existence by homotopy methods," HEC Research Papers Series 717, HEC Paris.

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    More about this item

    Keywords

    Nash; walras; equilibrium; asymmetric information;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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