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Walras and Dividends Equilibrium with Possibly Satiated Consumers

Nizar Allouch and Cuong Le van ()

No 555, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: The main contribution of the paper is to provide a weaker non-satiation assumption than the one commonly used in the literature to ensure the existence of competitive equilibrium. Our assumption allows for satiation points inside the set of individually feasible consumptions, provided that the consumer has satiation points available to him outside this set. As a result, we show the concept of equilibrium with dividends (See Aumann and Dreze (1986), Mas-Collel (1992)) is pertinent only when the set of satiation points is included in the set of individually feasible consumptions. Our economic motivation stems from the fact that in decentralized markets, increasing the incomes of consumers through dividends, if it is possible, is costly since it involves the intervention of a social planner. Then, we show, in particular, how in securities markets our weak nonsatiation assumption is satisfied by Werner's (1987) assumption.

Keywords: Satiation; Dividends; Equilibrium; Exchange Economy; Short-selling (search for similar items in EconPapers)
JEL-codes: D51 C71 (search for similar items in EconPapers)
Date: 2006-03
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Related works:
Journal Article: Walras and dividends equilibrium with possibly satiated consumers (2008) Downloads
Working Paper: Walras and dividends equilibrium with possibly satiated consumers (2008) Downloads
Working Paper: Walras and dividends equilibrium with possibly satiated consumers (2008) Downloads
Working Paper: Walras and dividends equilibrium with possibly satiated consumers (2008) Downloads
Working Paper: Walras and dividends equilibrium with possibly satiated consumers (2008) Downloads
Working Paper: Walras and dividends equilibrium with possibly satiated consumers (2008) Downloads
Working Paper: Walras and dividends equilibrium with possibly satiated consumers (2008) Downloads
Working Paper: Walras and Dividends Equilibrium with Possibly Satiated Consumers (2006) Downloads
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