On luxury and equilibrium

Andrea Mantovi ()

No 2014-EP02, Economics Department Working Papers from Department of Economics, Parma University (Italy)

Abstract: Building on a class of transcendental preferences for luxury, explicit solutions for price taking behavior and exchange equilibrium are discussed, which share the analytical tractability of Cobb-Douglas models and display positive relevance, along the lines discussed by Freixas and Mas-Colell (1987). The monotone comparative statics of the luxury effect is discussed. Pareto sets admit a simple characterization which generalizes the one set forth by Afriat (1987) for Cobb-Douglas exchange economies. Potential lines of progress are envisaged.

Keywords: Edgeworth Box; General Equilibrium; Luxury; Necessity; Comparative Statics; Pareto Set (search for similar items in EconPapers)
JEL-codes: D50 D51 D58 (search for similar items in EconPapers)
Pages: 26
Date: 2014
New Economics Papers: this item is included in nep-ger and nep-mic
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Journal Article: On Luxury and Equilibrium (2014)
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