The Equilibrium Existence Duality: Equilibrium with Indivisibilities & Income Effects

Paul Klemperer, Elizabeth Baldwin, Omer Edhan, Ravi Jagadeesan and Alexander Teytelboym

No 14926, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: 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.

JEL-codes: C62 D11 D44 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in nep-des, nep-mic and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://cepr.org/publications/DP14926 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: The Equilibrium Existence Duality: Equilibrium with Indivisibilities & Income Effects (2020)
Working Paper: The Equilibrium Existence Duality: Equilibrium with Indivisibilities & Income Effects (2020)
Working Paper: The Equilibrium Existence Duality: Equilibrium with Indivisibilities & Income Effects (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:14926

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP14926

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().