Generalized equilibrium in an economy without the survival assumption
It is well known that an equilibrium in the Arrow-Debreu model may fail to exist if a very restrictive condition called the survival assumption is not satisfied. We study two approaches that allow for the relaxation of this condition. Danilov and Sotskov (1990), and Florig (2001) developed a concept of a generalized equilibrium based on a notion of hierarchic prices. Marakulin (1990) proposed a concept of an equilibrium with non-standard prices. In this paper, we establish the equivalence between non-standard and hierarchic equilibria. Furthermore, we show that for any specified system of dividends the set of such equilibria is generically finite. We also provide a generic characterization of hierarchic equilibria and give an easy proof of the core equivalence result.
|Competitive equilibrium, Constrained equilibrium, Hierarchic price, Non-standard analysis, Satiation|
|Econometric Institute Research Papers|
|Organisation||Erasmus School of Economics|
Konovalov, A, & Marakulin, V. (2002). Generalized equilibrium in an economy without the survival assumption (No. EI 2002-49). Econometric Institute Research Papers. Retrieved from http://hdl.handle.net/1765/537