Value Cores for Finite Agents

Paul van Moeseke

The Economic Record, 1979, vol. 55, issue 1, 76-81

Abstract: The standard definition of the competitive equilibrium, at given prices, presents the difficulty that finite agents (i.e. agents with finite budget and production sets), and a fortiori coalitions of such agents, need not be price takers and will upset the equilibrium. Since 1963 an extensive literature has sprung up, which has dealt with the problem, essentially by considering infinite numbers of infinitesimal agents. The present article outlines two alternative approaches to deal with this problem, both of which, realistically, admit (a finite number of) finite agents and redefine the core in terms of the value structure of the economy, viz. prices in the presence of controls, and cost and revenue functions in their absence. It is shown that the notion of value core, here introduced, coincides with that of competitive equilibrium, which is formulated as a characteristic‐function game.

Date: 1979
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