Back to Fundamentals: Equilibrium in Abstract Economies

Michael Richter and Ariel Rubinstein ()

American Economic Review, 2015, vol. 105, issue 8, 2570-94

Abstract: We propose a new abstract definition of equilibrium in the spirit of competitive equilibrium: a profile of alternatives and a public ordering (expressing prestige, price, or a social norm) such that each agent prefers his assigned alternative to all lower-ranked ones. The equilibrium operates in an abstract setting built upon a concept of convexity borrowed from convex geometry. We apply the concept to a variety of convex economies and relate it to Pareto optimality. The "magic" of linear equilibrium prices is put into perspective by establishing an analogy between linear functions in the standard convexity and "primitive orderings" in the abstract convexity. (JEL I11, I18, J44, K13)

JEL-codes: C90 D11 H00 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.20140270
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Citations: View citations in EconPapers (28)

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