Probability of survival in a random exchange economy with dependent agents
Economic Theory, 2003, vol. 21, issue 4, 907-912
In this paper I analyze the general equilibrium in a random Walrasian economy. Dependence among agents is introduced in the form of dependency neighborhoods. Under the uncertainty, an agent may fail to survive due to a meager endowment in a particular state (direct effect), as well as due to unfavorable equilibrium price system at which the value of the endowment falls short of the minimum needed for survival (indirect terms-of-trade effect). To illustrate the main result I compute the stochastic limit of equilibrium price and probability of survival of an agent in a large Cobb-Douglas economy. Copyright Springer-Verlag Berlin Heidelberg 2003
Keywords: Keywords and Phrases: General equilibrium; Random endowments and preferences.; JEL Classification Numbers: D50; D80. (search for similar items in EconPapers)
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