The individualistic foundation of equilibrium distribution

Xiang Sun, Yeneng Sun and Haomiao Yu

Journal of Economic Theory, 2020, vol. 189, issue C

Abstract: This paper proposes a solution concept called the type-symmetric randomized equilibrium (TSRE), where agents with the same type of characteristics take the same randomized choice. It is shown that this solution concept provides a micro-foundation for the macro notion of equilibrium distribution for economies and games with many agents. In particular, any Walrasian (resp. Nash) equilibrium distribution in a large economy (resp. game) is shown to be uniquely determined by one TSRE if the agent space is modeled by the classical Lebesgue unit interval. The relationship of TSRE with other equilibrium notions is also established.

Keywords: Equilibrium distribution; Large economy; Large game; Lebesgue unit interval; Type-symmetric randomized equilibrium; Rich Fubini extension (search for similar items in EconPapers)
JEL-codes: C62 C72 D50 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:189:y:2020:i:c:s0022053120300788

DOI: 10.1016/j.jet.2020.105083

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