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Core Equivalence Theorem with Production

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  • Xiong, Siyang
  • Zheng, Charles Zhoucheng

Abstract

In production economies, the extent to which non-equilibria are blocked depends on the allocation of control rights among shareholders, because a blocking coalition's resources are affected by the firms it jointly owns with outsiders. We formulate a notion of blocking that takes such interdependency problem into account, and we prove an analog of the Debreu-Scarf theorem for replica production economies. Our theorem differs from theirs in using an additional assumption, which we argue is indispensable and is driven by the interdependency problem.

Suggested Citation

  • Xiong, Siyang & Zheng, Charles Zhoucheng, 2007. "Core Equivalence Theorem with Production," Staff General Research Papers Archive 12697, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:12697
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    References listed on IDEAS

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    1. Haller, Hans, 1991. "Corporate Production and Shareholder Cooperation under Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(4), pages 823-842, November.
    2. Aliprantis, Charalambos D & Brown, Donald J & Burkinshaw, Owen, 1987. "Edgeworth Equilibria," Econometrica, Econometric Society, vol. 55(5), pages 1109-1137, September.
    3. Ellickson, Bryan & Grodal, Birgit & Scotchmer, Suzanne & Zame, William R., 2001. "Clubs and the Market: Large Finite Economies," Journal of Economic Theory, Elsevier, vol. 101(1), pages 40-77, November.
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    5. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    6. Gerard Debreu, 1963. "On a Theorem of Scarf," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 30(3), pages 177-180.
    7. Bryan Ellickson & Birgit Grodal & Suzanne Scotchmer & William R. Zame, 2006. "The Organization of Production, Consumption and Learning," Studies in Economic Theory, in: Christian Schultz & Karl Vind (ed.), Institutions, Equilibria and Efficiency, chapter 9, pages 149-185, Springer.
    8. Aliprantis, Charalambos D. & Brown, Donald J. & Burkinshaw, Owen, 1987. "Edgeworth equilibria in production economies," Journal of Economic Theory, Elsevier, vol. 43(2), pages 252-291, December.
    9. Boehm, Volker, 1974. "The Limit of the Core of an Economy with Production," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(1), pages 143-148, February.
    10. Anderson, Robert M, 1978. "An Elementary Core Equivalence Theorem," Econometrica, Econometric Society, vol. 46(6), pages 1483-1487, November.
    11. Edgeworth, Francis Ysidro, 1881. "Mathematical Psychics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number edgeworth1881.
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    Cited by:

    1. Hans Gersbach & Hans Haller, 2011. "General Equilibrium with Multi-Member Households and Production," CESifo Working Paper Series 3659, CESifo.
    2. Xiong, Siyang & Zheng, Charles Zhoucheng, 2007. "Stochastic Blocking and Core Convergence in Nonconvex Production Economies," Staff General Research Papers Archive 12711, Iowa State University, Department of Economics.
    3. Zheng, Charles Zhoucheng, 2009. "A Coase Theorem Based on a New Concept of the Core," Staff General Research Papers Archive 13051, Iowa State University, Department of Economics.
    4. Xiong, Siyang & Zheng, Charles Zhoucheng, 2008. "Interactive Blocking in Arrow-Debreu Economies," Staff General Research Papers Archive 12882, Iowa State University, Department of Economics.
    5. Cato, Susumu, 2010. "Local strict envy-freeness in large economies," Mathematical Social Sciences, Elsevier, vol. 59(3), pages 319-322, May.

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