IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Existence and efficiency of equilibrium in economies with increasing returns to scale: An exposition

  • Antonio Villar Notario

    (Instituto Valenciano de Investigaciones Económicas)

The purpose of this paper is to offer an exposition of the results on the existence and optimality of equilibria when production sets are not assumed to be convex, in a general equilibrium framework. We aim at providing a formal and systematic account of the main results available, rather than survey the literature. Besides presenting an abstract model, where firms' behavior is described by general pricing rules, we analyze the family of Loss-free Pricing Rules (focusing on Profit Maximization, both constrained and unconstrained, and Average Cost Pricing), and the Marginal Pricing Rule and other regulation policies. Then, we discuss the efficiency problem, referring to both the first and second welfare theorems.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-1994-07.pdf
File Function: Fisrt version / Primera version, 1994
Download Restriction: no

Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 1994-07.

as
in new window

Length: 75 pages
Date of creation: May 1994
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:1994-07
Contact details of provider: Postal:
C/ Guardia Civil, 22, Esc 2a, 1o, E-46020 VALENCIA

Phone: +34 96 319 00 50
Fax: +34 96 319 00 55
Web page: http://www.ivie.es/
Email:


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.:

as in new window
  1. Bonnisseau, J.-M. & Cornet, B., 1988. "Existense of marginal cost pricing equilibria: the nonsmooth case," CORE Discussion Papers 1988015, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Donald J. Brown & Geoffrey Heal, 1979. "Equity, Efficiency and Increasing Returns," Review of Economic Studies, Oxford University Press, vol. 46(4), pages 571-585.
  3. Herrero, Carmen & Villar, Antonio, 1988. "General Equilibrium in a Non-linear Leontief Framework," The Manchester School of Economic & Social Studies, University of Manchester, vol. 56(2), pages 159-66, June.
  4. BONNISSEAU, Jean-Marc & CORNET, Bernard, . "Valuation equilibrium and Pareto optimum in non-convex economies," CORE Discussion Papers RP 817, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Villar, Antonio, 1994. "Equilibrium with Nonconvex Technologies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 4(4), pages 629-38, May.
  6. Ichiishi, Tatsuro & Quinzii, Martine, 1983. "Decentralization for the Core of a Production Economy with Increasing Returns," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(2), pages 397-412, June.
  7. Jean-Marc Bonnisseau, 1988. "On two existence results of equilibria in economies with increasing returns," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00187224, HAL.
  8. Quinzii, Martine, 1982. "An existence theorem for the core of a productive economy with increasing returns," Journal of Economic Theory, Elsevier, vol. 28(1), pages 32-50, October.
  9. Brown, Donald J. & Heller, Walter P. & Starr, Ross M., 1992. "Two-part marginal cost pricing equilibria: Existence and efficiency," Journal of Economic Theory, Elsevier, vol. 57(1), pages 52-72.
  10. Samet, Dov & Tauman, Yair, 1982. "The Determination of Marginal Cost Prices under a Set of Axioms," Econometrica, Econometric Society, vol. 50(4), pages 895-909, July.
  11. Hart, Sergiu & Mas-Colell, Andreu, 1989. "Potential, Value, and Consistency," Econometrica, Econometric Society, vol. 57(3), pages 589-614, May.
  12. MacKinnon, James G., 1979. "Computing equilibria with increasing returns," European Economic Review, Elsevier, vol. 12(1), pages 1-16, February.
  13. Cornet, B., 1984. "Existence of equilibria in economies with increasing returns," CORE Discussion Papers 1984007, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  14. DEHEZ, Pierre & DREZE, Jacques, . "Distributive production sets and equilibria with increasing returns," CORE Discussion Papers RP 818, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  15. DEHEZ, Pierre & DREZE, Jacques, . "Competitive equilibria with quantity-taking producers and increasing returns to scale," CORE Discussion Papers RP 819, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  16. Jouini, Elyes, 1989. "A remark on Clarke's normal cone and the marginal cost pricing rule," Journal of Mathematical Economics, Elsevier, vol. 18(1), pages 95-101, February.
  17. Benassy, Jean-Pascal, 1991. "Monopolistic competition," Handbook of Mathematical Economics, in: W. Hildenbrand & H. Sonnenschein (ed.), Handbook of Mathematical Economics, edition 1, volume 4, chapter 37, pages 1997-2045 Elsevier.
  18. Mas-Colell, Andreu & Silvestre, Joaquim, 1989. "Cost share equilibria: A Lindahlian approach," Journal of Economic Theory, Elsevier, vol. 47(2), pages 239-256, April.
  19. Vohra, Rajiv, 1988. "Optimal regulation under fixed rules for income distribution," Journal of Economic Theory, Elsevier, vol. 45(1), pages 65-84, June.
  20. Dierker, Egbert & Guesnerie, Roger & Neuefeind, Wilhelm, 1985. "General Equilibrium When Some Firms Follow Special Pricing Rules," Econometrica, Econometric Society, vol. 53(6), pages 1369-93, November.
  21. Donald J. Brown & Geoffrey M. Heal, 1983. "The Optimality of Regulated Pricing: A General Equilibrium Analysis," Cowles Foundation Discussion Papers 684, Cowles Foundation for Research in Economics, Yale University.
  22. M. Ali Khan & Rajiv Vohra, 1987. "An Extension of the Second Welfare Theorem to Economies with Nonconvexities and Public Goods," The Quarterly Journal of Economics, Oxford University Press, vol. 102(2), pages 223-241.
  23. Cornet, B., 1986. "The second welfare theorem in nonconvex economies," CORE Discussion Papers 1986030, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  24. Brown, Donald J., 1991. "Equilibrium analysis with non-convex technologies," Handbook of Mathematical Economics, in: W. Hildenbrand & H. Sonnenschein (ed.), Handbook of Mathematical Economics, edition 1, volume 4, chapter 36, pages 1963-1995 Elsevier.
  25. Egbert Dierker, 1986. "When does marginal cost pricing lead to Pareto efficiency?," Journal of Economics, Springer, vol. 46(1), pages 41-66, December.
  26. DEHEZ, Pierre & DREZE, Jacques, 1987. "Distributive production sets and equilibria with increasing returns," CORE Discussion Papers 1987001, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  27. BONNISSEAU, Jean-Marc & CORNET, Bernard, . "Existence of equilibria when firms follow bounded losses pricing rules," CORE Discussion Papers RP 814, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  28. KAMIYA, Kazuya, 1987. "Existence and uniqueness of equilibria with increasing returns," CORE Discussion Papers 1987040, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  29. ROBERTS, John & SONNENSCHEIN, Hugo, . "On the foundations of the theory of monopolistic competition," CORE Discussion Papers RP 296, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  30. Silvestre, Joaquim, 1978. "Increasing Returns in General Non-Competitive Analysis," Econometrica, Econometric Society, vol. 46(2), pages 397-402, March.
  31. repec:dau:papers:123456789/5649 is not listed on IDEAS
  32. Guesnerie, Roger, 1975. "Pareto Optimality in Non-Convex Economies," Econometrica, Econometric Society, vol. 43(1), pages 1-29, January.
  33. Dierker, E. & Neuefeind, W., 1987. "Quantity guided price setting," CORE Discussion Papers 1987043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  34. John S. Chipman, 1970. "External Economies of Scale and Competitive Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 347-385.
  35. Antonio Villar Notario, 1994. "Existence and optimality of social equilibrium with many convex and nonconvex firms," Working Papers. Serie AD 1994-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  36. Greenberg, Joseph & Shitovitz, Benyamin, 1984. "Aumann-Shapley prices as a scarf social equilibrium," Journal of Economic Theory, Elsevier, vol. 34(2), pages 380-382, December.
  37. Sharkey, William W., 1989. "Game theoretic modeling of increasing returns to scale," Games and Economic Behavior, Elsevier, vol. 1(4), pages 370-431, December.
  38. Silvestre, Joaquim, 1977. "General Monopolistic Equilibrium under Non-Convexities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 425-34, June.
  39. Vohra, Rajiv, 1992. "Marginal Cost Pricing under Bounded Marginal Returns," Econometrica, Econometric Society, vol. 60(4), pages 859-76, July.
  40. Donald J. Brown & Geoffrey M. Heal & M. Ali Khan & Rajiv Vohra, 1984. "On a General Existence Theorem for Marginal Cost Pricing Equilibria," Cowles Foundation Discussion Papers 724, Cowles Foundation for Research in Economics, Yale University.
  41. Edlin, Aaron S & Epelbaum, Mario, 1993. "Two-Part Marginal Cost Pricing Equilibria with n Firms: Sufficient Conditions for Existence and Optimality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(4), pages 903-22, November.
  42. Sharkey, W W, 1979. "Existence of a Core When There Are Increasing Returns," Econometrica, Econometric Society, vol. 47(4), pages 869-76, July.
  43. Mirman, Leonard J. & Tauman, Yair & Zang, Israel, 1986. "Ramsey prices, average cost prices and price sustainability," International Journal of Industrial Organization, Elsevier, vol. 4(2), pages 123-140, June.
  44. Calsamiglia, Xavier, 1977. "Decentralized resource allocation and increasing returns," Journal of Economic Theory, Elsevier, vol. 14(2), pages 263-283, April.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ivi:wpasad:1994-07. 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: (Departamento de Edición)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.