Minimal entropy and uniqueness of price equilibria in a pure exchange economy

Andrea Loi and Stefano Matta

Journal of Mathematical Economics, 2021, vol. 97, issue C

Abstract: We introduce uncertainty into a pure exchange economy and establish a connection between Shannon’s differential entropy and uniqueness of price equilibria. The following conjecture is proposed under the assumption of a uniform probability distribution: entropy is minimal if and only if the price is unique for every economy. We show the validity of this conjecture for an arbitrary number of goods and two consumers and, under certain conditions, for an arbitrary number of consumers and two goods.

Keywords: Entropy; Uniqueness of equilibrium; Price multiplicity; Equilibrium manifold; Minimal submanifold (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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Working Paper: Minimal entropy and uniqueness of price equilibria in a pure exchange economy (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:97:y:2021:i:c:s030440682100118x

DOI: 10.1016/j.jmateco.2021.102555

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