A critical comparison between the gross substitutes and complements conditions

Koji Yokote

Economics Letters, 2023, vol. 226, issue C

Abstract: In a transferable utility matching environment, the gross substitutes condition (Kelso and Crawford 1982) and the gross complements condition (Rostek and Yodar 2020) guarantee the existence of equilibrium outcomes. We show that the difference between the two conditions is pinpointed to the direction of price changes: the former condition requires that any set of demanded contracts is still demanded after the prices of other contracts increase, while the latter condition requires that any set of demanded contracts is still demanded after the prices of other contracts decrease.

Keywords: Matching; Equilibrium existence; Gross substitutability; Gross complementarity (search for similar items in EconPapers)
JEL-codes: C78 D47 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:226:y:2023:i:c:s0165176523001313

DOI: 10.1016/j.econlet.2023.111106

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