Buying several indivisible goods

Carmen Bevia () and Jose Silva

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

Abstract: This paper studies economies where agents exchange indivisible goods and money. Agents havepotencial use for all indivisible goods and the indivisible goods are differentiated. We assume thatagents have quasilinear utilities in money, have sufficiently money endowments to afford anygroup of objects priced below their reservation values, have reservation values which aresubmodular and satisfy the Cardinality Condition. This Cardinality Condition requires that for eachagent the marginal utility of an object only depends on the number of objects to which it is added,not an their characteristics. Under these assumptions, we show that the set of competitiveequilibrium prices is a non empty lattice and that, in any equilibrium, the price of an object isbetween the social value of the object and its second best use.

Keywords: Indivisible goods; competitive equilibrium prices; prices lattice (search for similar items in EconPapers)
Pages: 37 pages
Date: 1997-12
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Citations: View citations in EconPapers (2)

Published by Ivie

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http://www.ivie.es/downloads/docs/wpasad/wpasad-1997-27.pdf Fisrt version / Primera version, 1997 (application/pdf)

Related works:
Working Paper: BUYING SEVERAL INDIVISIBLE GOODS (2003)
Journal Article: Buying several indivisible goods (1999)
Working Paper: BUYING SEVERAL INDIVISIBLE GOODS
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:1997-27

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