On the regularity of smooth production economies with externalities: Competitive equilibrium à la Nash

Elena del Mercato and Vincenzo Platino

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: We consider a general equilibrium model of a private ownership economy with consumption and production externalities. The choices of all agents (households and firms) may affect utility functions and production technologies. The allocation of a competitive equilibrium is a Nash equilibrium. We provide an example showing that, under standard assumptions, competitive equilibria are indeterminate in an open set of the household's endowments. Next, we consider a new version of this model, with firms' endowments in the spirit of Geanakoplos et al. (J Math Econ 19:113–151, 1990). In our model, firms' endowments impact the technologies of the other firms. We then prove that, generically in the space of endowments of households and firms, each economy has a finite number of competitive equilibria and each competitive equilibrium is locally a differentiable map of the fundamental parameters.

Keywords: private ownership economies; competitive equilibrium à la Nash; regular economies; externalities (search for similar items in EconPapers)
Date: 2017-01-26
Note: View the original document on HAL open archive server: https://hal.science/hal-01438970v1
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Citations: View citations in EconPapers (5)

Published in Economic Theory, 2017, 63 (1), pp.287-307. ⟨10.1007/s00199-016-1029-5⟩

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Related works:
Journal Article: On the regularity of smooth production economies with externalities: competitive equilibrium à la Nash (2017)
Working Paper: On the regularity of smooth production economies with externalities: Competitive equilibrium à la Nash (2017)
Working Paper: On the regularity of smooth production economies with externalities: Competitive equilibrium à la Nash (2017)
Working Paper: On the regularity of smooth production economies with externalities: Competitive equilibrium à la Nash (2016)
Working Paper: On the regularity of smooth production economies with externalities: Competitive equilibrium à la Nash (2016)
Working Paper: On the regularity of smooth production economies with externalities: Competitive equilibrium à la Nash (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-01438970

DOI: 10.1007/s00199-016-1029-5

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