MarketCommodityStructureinGeneralEquilibriumModel:The CommodificationTechnology

Ken Urai (), Hiromi Murakami (), Weiye Chen () and Yijik Oh ()
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Ken Urai: Graduate School of Economics, Osaka University
Hiromi Murakami: Faculty of Fine Arts, Kyoto City University of Arts
Weiye Chen: Graduate School of Economics, Osaka University
Yijik Oh: Graduate School of Economics, Osaka University

No 23-10, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: In this paper, we formalize the concept of commodification technology determining a commodity structure of the market as an extension of the standard Arrow-Debreu general equilibrium framework. Like the commodity differentiation approach in Mas-Colell (1975) and the hedonic approach in Rosen (1974), we treat a commodity as a bandle of characteristics. Such quality of each commodity as well as the market viability problem under asymmetric-information arguments like Dubey et al. (2000) and Bisin et al. (2011) to determine the market structure will be treated uniformly as an endogenous equilibrium state in a strict sense of the general equilibrium theory. In our model, a market participant (a consumer or a producer ) is supposed to have a commodification technology that enables each agent to prepare for market commodities based on their endowments and the transformation technology on basic characteristics, representing the costs for standardization, advertisement, signaling, etc.

Keywords: General Equilibrium Model; Commodity Differentiation; Market Structure; Asymmetoric Information; Commodification Technology (search for similar items in EconPapers)
JEL-codes: C62 D51 D82 L11 L15 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2023-09
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