Arbitrage and Equilibrium in Economies with Externalities

Cuong Le van, Frank Page and Myrna Wooders

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: We introduce consumption externalities into a general equilibrium model with arbitrary consumption sets. To treat the problem of existence of equilibrium, a condition of no unbounded arbitrage, extending the condition of Page (1987) and Page and Wooders (1993, 1996) is defined. It is proven that this condition is sufficient for the existence of an equilibrium and both necessary and sufficient for compactness of the set of rational allocations.

Keywords: CONSUMPTION; EXTERNALITIES; ARBITRAGE (search for similar items in EconPapers)
JEL-codes: E21 H23 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Working Paper: Arbitrage and Equilibrium in Economies with Externalities (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:588

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