Recontracting and Competition
We characterize the set of Walrasian allocations of an economy as the set of allocations which can be supported by abstract equilibria that satisfy a recontracting condition which reflects the idea that agents can freely trade with each other. An alternative (and weaker) recontracting condition characterizes the core. The results are extended to production economies by extending the definition of the recontracting condition to include the possibility of agents to recontract with firms. However, no optimization requirement is imposed on firms. In pure exchange economies, an abstract equilibrium is a feasible allocation and a list of choice sets, one for each agent, that satisfy the following conditions: an agent's choice set is a subset of the commodity space that includes his endowment; and each agent's equilibrium bundle is a maximal element in his choice set, with respect to his preferences. The recontracting condition requires that any agent can buy bundles from any other agent's choice set by ofering the other agent a bundle he prefers to his equilibrium bundle.
|Date of creation:||Jan 1996|
|Date of revision:||Jun 1996|
|Contact details of provider:|| Postal: |
Web page: http://www.nirdagan.com/research/
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.:
- Sala-i-Martin, Xavier, 1994.
"A Positive Theory of Social Security,"
CEPR Discussion Papers
1025, C.E.P.R. Discussion Papers.
- Antoni Bosch-Domènech & Shyam Sunder, 1996.
"Tracking the invisible hand: Convergence of double auctions to competitive equilibrium,"
Economics Working Papers
91, Department of Economics and Business, Universitat Pompeu Fabra.
- Antoni Bosch-Domenech & Shyam Sunder, 2000. "Tracking the Invisible Hand: Convergence of Double Auctions to Competitive Equilibrium," Computational Economics, Society for Computational Economics, vol. 16(3), pages 257-284, December.
- Bosch, A. & Sunder, S., 1994. "Tracking the Invisible Hand: Convergence of Double Auctions to Competitive Equilibrium," GSIA Working Papers 1994-11, Carnegie Mellon University, Tepper School of Business.
- Shyam NMI Sunder & Antoni Bosch-Domènech, 2001. "Tracking the Invisible Hand: Convergence of Double Auctions to Competitive Equilibrium," Yale School of Management Working Papers ysm204, Yale School of Management.
- Thierry Foucault, 1994. "Price formation and order placement strategies in a dynamic order driven market," Economics Working Papers 99, Department of Economics and Business, Universitat Pompeu Fabra.
When requesting a correction, please mention this item's handle: RePEc:nid:ndagan:013. 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: (Nir Dagan)
If references are entirely missing, you can add them using this form.