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MarketCommodityStructureinGeneralEquilibriumModel:The CommodificationTechnology

Author

Listed:
  • Ken Urai

    (Graduate School of Economics, Osaka University)

  • Hiromi Murakami

    (Faculty of Fine Arts, Kyoto City University of Arts)

  • Weiye Chen

    (Graduate School of Economics, Osaka University)

  • Yijik Oh

    (Graduate School of Economics, Osaka University)

Abstract

In this paper, we formalize the concept of commodification technology determining a commodity structure of the market as an extension of the standard Arrow-Debreu general equilibrium framework. Like the commodity differentiation approach in Mas-Colell (1975) and the hedonic approach in Rosen (1974), we treat a commodity as a bandle of characteristics. Such quality of each commodity as well as the market viability problem under asymmetric-information arguments like Dubey et al. (2000) and Bisin et al. (2011) to determine the market structure will be treated uniformly as an endogenous equilibrium state in a strict sense of the general equilibrium theory. In our model, a market participant (a consumer or a producer ) is supposed to have a commodification technology that enables each agent to prepare for market commodities based on their endowments and the transformation technology on basic characteristics, representing the costs for standardization, advertisement, signaling, etc.

Suggested Citation

  • Ken Urai & Hiromi Murakami & Weiye Chen & Yijik Oh, 2023. "MarketCommodityStructureinGeneralEquilibriumModel:The CommodificationTechnology," Discussion Papers in Economics and Business 23-10, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:2310
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    File URL: http://www2.econ.osaka-u.ac.jp/econ_society/dp/2310.pdf
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    References listed on IDEAS

    as
    1. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    2. Ken Urai & Akihiko Yoshimachi & Kohei Shiozawa, 2013. "General Equilibrium Model for an Asymmetric Information Economy without Delivery Upper Bounds," Discussion Papers in Economics and Business 13-27-Rev.2, Osaka University, Graduate School of Economics, revised Mar 2017.
    3. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
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    Keywords

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    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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