A General Equilibrium Model of the Three-Sector Competitive Economy

S.Y. Wu
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S.Y. Wu: Economics

Microeconomics from University Library of Munich, Germany

Abstract: The presence of externality, indivisibility, and uncertainty destroys the market's ability to coordinate production. Entrepreneurs rise to organize production by assuming a part of the allocative role traditionally reserved exclusively to the market. Assume that there are three classes of entrepreneurs: profit- oriented, nonprofit oriented and public entrepreneurs. These entrepreneurs cooperate with their own type to organize, respectively, the for-profit and nonprofit firms, as well as local communities. They do so by playing a society-wide cooperative game. At the conclusion of this game, not only firms and communities come into existence, production and exchange also take place at competitive equilibrium prices. This equilibrium is pareto optimal.

JEL-codes: D1 D2 D3 D4 (search for similar items in EconPapers)
Pages: 42 pages
Date: 1996-03-05
Note: Zipped using PKZIP v2.04, encoded using UUENCODE v5.15. Zipped file includes 1 file -- handbook (body in WP5.1, 42 pages)
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