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Equilibria with Increasing Returns: Sufficient Conditions on Bounded Production Allocations
Author(s) -
BONNISSEAU J. M.,
JAMIN A.
Publication year - 2008
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2008.00395.x
Subject(s) - bounded function , returns to scale , economics , production (economics) , general equilibrium theory , microeconomics , marginal cost , scale (ratio) , mathematical economics , econometrics , mathematics , mathematical analysis , physics , quantum mechanics
This paper deals with the existence of marginal pricing equilibrium or equilibrium with general pricing rules in an economy with increasing returns to scale or more general types of nonconvexities in production. Its main contribution is to demonstrate existence of equilibrium with bounded loss and survival assumptions required only on a bounded subset of production allocations. Furthermore, we require only a weakened form of the free‐disposal assumption and we also allow nonpositive prices.