Characterising competitive equilibrium in terms of opportunity

Robert Sugden

Social Choice and Welfare, 2017, vol. 48, issue 3, No 1, 487-503

Abstract: Abstract This paper analyses alternative profiles of opportunity sets for individuals in an exchange economy, without assuming that individuals’ choices reveal coherent preferences. It introduces the concept of a ‘market-clearing single-price regime’, representing a profile of opportunity sets consistent with competitive equilibrium. It also proposes an opportunity-based normative criterion, the Strong Opportunity Criterion, which is analogous with the core in preference-based analysis. It shows that every market-clearing single-price regime satisfies the Strong Opportunity Criterion and that, in the limit as an economy is replicated, only such regimes have this property.

Keywords: Opportunity criterion; Competitive equilibrium; Behavioural welfare economics (search for similar items in EconPapers)
Date: 2017
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Working Paper: Characterising competitive equilibrium in terms of opportunity (2015)
Working Paper: Characterising competitive equilibrium in terms of opportunity (2014)
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DOI: 10.1007/s00355-016-1015-7

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