Characteristics of good and competitive equilibrium

Damien Gaumont and Philippe Michel

No 2004035, Discussion Papers (REL - Recherches Economiques de Louvain) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: We analyse the consequences of a change of the characteristics of goods due to new information on the equilibrium of a pure exchange economy with n goods and m agents. Some changes of the characteristics of goods ˆ la Lancaster have a positive effect on utility. In the general competitive equilibrium, some agents gain but others may lose. Nevertheless there is an increase of a linear combination of the utilities of the agents. The different possibilities of gains and losses are explicitly analysed in an example with two goods and two agents.

Keywords: Pure exchange economy; Characteristic of goods; Price determination; Pareto efficiency (search for similar items in EconPapers)
JEL-codes: D50 (search for similar items in EconPapers)
Date: 2004-09-01
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Journal Article: Characteristics of good and competitive equilibrium (2004)
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