On economic efficiency under non-convexity

Jean-Paul Chavas () and Walter Briec ()

Economic Theory, 2012, vol. 50, issue 3, 701 pages

Abstract: This paper investigates economic efficiency under non-convexity. The analysis relies on a generalization of the separating hyperplane theorem under non-convexity. The concept of zero-maximality is used to characterize Pareto efficiency under non-convexity. We show the existence of a separating hypersurface that can be used to provide a dual characterization of efficient allocations. When the separating hypersurface is non-linear, this implies that non-linear pricing is an integral part of economic efficiency. Implications for the decentralization of economic decisions under non-convexity are discussed. Copyright Springer-Verlag 2012

Keywords: Efficiency; Zero-maximality; Non-convexity; Nonlinear pricing; C02; D5; D6 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (15)

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DOI: 10.1007/s00199-010-0587-1

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