Strictly Fair Allocations in Large Exchange Economies

Lin Zhou

No 972, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: In this paper we introduce the concept of a strictly fair allocation and investigate the set of strictly fair allocations in large exchange economies. We prove that when agents' utility functions are differentiable, the set of strictly fair allocations coincides with the set of equal-income Walrasian equilibria. This is shown using both the "limit theorem" approach the "limit economy" approach. We also extend the analysis to economies that have both atoms and an atomless sector. These results substantially improve upon the existing characterizations of equal-income Walrasian equilibria in terms of both economic efficiency and economic equity.

Keywords: Exchange economy; Walrasian equilibrium; resource allocation (search for similar items in EconPapers)
JEL-codes: D51 D58 D60 (search for similar items in EconPapers)
Pages: 26 pages
Date: 1991-03
Note: CFP 813.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Journal of Economic Theory (June 1992), 57(1): 160-175

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