New PDF release: Game-Theoretic Methods in General Equilibrium Analysis

such that L:aES g(a) = L:aES e(a), and g(a) >-- f(a) for all a E S. The core C(E) of an economy is the set of allocations which are not blocked by any coalition. e. i: IIPIIt = 1}. The first results on core convergence were obtained for sequences of replications of a base economy: the n'th economy contains n clones of each agent in the base economy.

20] Vind K. (1964) Edgeworth-allocations in an exchange economy with many traders, International Economic Review, 5, 165-177. [21] Vind K. (1972) A third remark on the core of an atomless economy, Econometrica, 40, 585-586. Chapter II Core Convergence in Perfectly Competitive Economies ROBERT 1 M. 1 Walrasian allocations are in the core The set of Walrasian allocations of an economy is contained in the core. This constitutes an important strengthening of the first theorem of welfare economics that asserts any Walrasian equilibrium is Pareto efficient, in the sense that to efficiency it adds a notion of fairness.

Definition 4 (En)nENis called a replica sequence if there is a finite set of types T such that: {i) (>--a, e(a)) E T for all a E An and for all n (type sequence); {ii) En has exactly n agents of each type. 3 What does convergence mean? Two questions can be addressed. Does the core converge to the set ofWalrasian equilibria? How fast does it converge? Note that these two questions are different in nature since the first one only requires a topological setting while the second one supposes that a metric has been defined.

Download PDF sample

Game-Theoretic Methods in General Equilibrium Analysis by Jean-François Mertens (auth.), Jean-François Mertens, Sylvain Sorin (eds.)

by Ronald

Rated 4.33 of 5 – based on 20 votes