The first fundamental theorem of welfare in a general equilibrium evolutionary setting

Ahmad Naimzada and Marina Pireddu

No 415, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: In the present note we prove the first fundamental theorem of welfare economics, according to which all equilibrium allocations are Pareto optimal, for the standard pure exchange model with shares. In this context the social interaction among agents enters the definition of equilibrium only through the market clearing conditions, but it does not affect the agents’ maximization problem. We show that the first fundamental theorem of welfare holds true also when introducing stationary equilibria in relation to a share updating mechanism.

Keywords: general equilibrium; stationary equilibria; Pareto optimality. (search for similar items in EconPapers)
Pages: 9
Date: 2019-06-26, Revised 2019-06-06
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (1)

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