The Core of an Economy with Transaction Costs

Rafael Repullo

The Review of Economic Studies, 1988, vol. 55, issue 3, 447-458

Abstract: This paper defines a new concept of the core for an economy with transaction costs, and uses this concept to prove a limit theorem for sequences of replica economies. In this way it provides a rationale for a definition of equilibrium in which agents face a sequence of budget constraints. Since economies with incomplete markets are special cases of economies with transaction costs, the limit theorem also provides a rationale for Radner's equilibrium of plans, prices, and price expectations.

Date: 1988
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:55:y:1988:i:3:p:447-458.

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