Equal rights to trade and mediate | Zendy

Peter J. Hammond | Zendy

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Equal rights to trade and mediate

Author(s) -

Peter J. Hammond

Publication year - 2003

Publication title -

social choice and welfare

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.504

H-Index - 52

eISSN - 1432-217X

pISSN - 0176-1714

DOI - 10.1007/s00355-003-0255-5

Subject(s) - convexity , mathematical economics , economics , pareto principle , general equilibrium theory , set (abstract data type) , property (philosophy) , property rights , pareto efficiency , preference , regular polygon , pareto optimal , net (polyhedron) , finite set , microeconomics , aggregate (composite) , exchange economy , mathematics , computer science , financial economics , mathematical analysis , philosophy , operations management , composite material , programming language , materials science , geometry , epistemology

Consider any exchange economy with a fixed finite set of traders whose preference orderings and feasible sets of net trades satisfy standard convexity and continuity assumptions. Suppose these traders are granted equal rights to choose net trade vectors within a common convex cone. This property, when combined with Pareto efficiency, characterizes Walrasian equilibrium without lump-sum transfers in two special cases: when there are only two goods; or when at least one trader has unique supporting prices. In general, even without imposing Pareto efficiency explicitly, conferring an additional right to mediate mutually beneficial transactions with other traders will characterize Walrasian equilibrium.

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