The Equilibrium Existence Duality: Equilibrium with Indivisibilities & Income Effects

Elizabeth Badlwin (), Omer Edhan, Ravi Jagadeesan, Paul Klemperer and Alexander Teytelboym
Additional contact information
Elizabeth Badlwin: Dept of Economics and Hertford College, University of Oxford

No 2020-W08, Economics Papers from Economics Group, Nuffield College, University of Oxford

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

Pages: 49 pages
Date: 2020-07-01
New Economics Papers: this item is included in nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://www.nuffield.ox.ac.uk/economics/Papers/202 ... xistence-Duality.pdf (application/pdf)

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:nuf:econwp:2008

Access Statistics for this paper

More papers in Economics Papers from Economics Group, Nuffield College, University of Oxford Contact information at EDIRC.
Bibliographic data for series maintained by Maxine Collett ().