The equilibrium existence duality: equilibrium with indivisibilities & income effects
We show that, with indivisible goods, the existence of competitive equilibrium fundamentally depends on agents' substitution effects, not their income effects. Our Equilibrium Existence Duality allows us to transport results on the existence of competitive equilibrium from settings with transfe...
| Main Authors: | , , , |
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| Format: | Working paper |
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University of Oxford
2020
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| _version_ | 1797065829480660992 |
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| author | Baldwin, E Klemperer, P Teytelboym, A Jagadeesan, O |
| author_facet | Baldwin, E Klemperer, P Teytelboym, A Jagadeesan, O |
| author_sort | Baldwin, E |
| collection | OXFORD |
| description | We show that, with indivisible goods, the existence of competitive equilibrium fundamentally depends on agents' substitution effects, not their income effects. Our Equilibrium Existence Duality allows us to transport results on the existence of competitive equilibrium from settings with transferable utility to settings with income effects. One consequence is that net substitutability—which is a strictly weaker condition than gross substitutability—is sufficient for the existence of competitive equilibrium. We also extend the "demand types" classification of valuations to settings with income effects and give necessary and sufficient conditions for a pattern of substitution effects to guarantee the existence of competitive equilibrium. |
| first_indexed | 2024-03-06T21:34:12Z |
| format | Working paper |
| id | oxford-uuid:45ad93fe-75a6-4921-97cd-1cd3d88aef52 |
| institution | University of Oxford |
| last_indexed | 2024-03-06T21:34:12Z |
| publishDate | 2020 |
| publisher | University of Oxford |
| record_format | dspace |
| spelling | oxford-uuid:45ad93fe-75a6-4921-97cd-1cd3d88aef522022-03-26T15:09:11ZThe equilibrium existence duality: equilibrium with indivisibilities & income effectsWorking paperhttp://purl.org/coar/resource_type/c_8042uuid:45ad93fe-75a6-4921-97cd-1cd3d88aef52Bulk import via SwordSymplectic ElementsUniversity of Oxford2020Baldwin, EKlemperer, PTeytelboym, AJagadeesan, OWe show that, with indivisible goods, the existence of competitive equilibrium fundamentally depends on agents' substitution effects, not their income effects. Our Equilibrium Existence Duality allows us to transport results on the existence of competitive equilibrium from settings with transferable utility to settings with income effects. One consequence is that net substitutability—which is a strictly weaker condition than gross substitutability—is sufficient for the existence of competitive equilibrium. We also extend the "demand types" classification of valuations to settings with income effects and give necessary and sufficient conditions for a pattern of substitution effects to guarantee the existence of competitive equilibrium. |
| spellingShingle | Baldwin, E Klemperer, P Teytelboym, A Jagadeesan, O The equilibrium existence duality: equilibrium with indivisibilities & income effects |
| title | The equilibrium existence duality: equilibrium with indivisibilities & income effects |
| title_full | The equilibrium existence duality: equilibrium with indivisibilities & income effects |
| title_fullStr | The equilibrium existence duality: equilibrium with indivisibilities & income effects |
| title_full_unstemmed | The equilibrium existence duality: equilibrium with indivisibilities & income effects |
| title_short | The equilibrium existence duality: equilibrium with indivisibilities & income effects |
| title_sort | equilibrium existence duality equilibrium with indivisibilities income effects |
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