Existence and efficiency of equilibrium in economies with increasing returns to scale: An exposition

Antonio Villar

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: The purpose of this paper is to offer an exposition of the results on the existence and optimality of equilibria when production sets are not assumed to be convex, in a general equilibrium framework. We aim at providing a formal and systematic account of the main results available, rather than survey the literature. Besides presenting an abstract model, where firms' behavior is described by general pricing rules, we analyze the family of Loss-free Pricing Rules (focusing on Profit Maximization, both constrained and unconstrained, and Average Cost Pricing), and the Marginal Pricing Rule and other regulation policies. Then, we discuss the efficiency problem, referring to both the first and second welfare theorems.

Keywords: Increasing returns; equilibrium; optimality (search for similar items in EconPapers)
Pages: 75 pages
Date: 1994-05
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Citations: View citations in EconPapers (2)

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Journal Article: Existence and efficiency of equilibrium in economics with increasing returns to scale: an exposition (1994)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:1994-07

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