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Walrasian analysis via two-player games

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  • Hervés-Beloso, Carlos
  • Moreno-García, Emma

Abstract

We associate to any pure exchange economy a game with only two players, regardless of the number of consumers. In this two-player game, each player represents a different role of the society, formed by all the individuals in the economy. Player 1 selects feasible allocations trying to make Pareto improvements. Player 2 chooses an alternative from the wider range of allocations that are feasible in the sense of Aubin. The set of Nash equilibria of our game is non-empty and our main result provides a characterization of Walrasian equilibria allocations as strong Nash equilibria of the associated society game.

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  • Hervés-Beloso, Carlos & Moreno-García, Emma, 2009. "Walrasian analysis via two-player games," Games and Economic Behavior, Elsevier, vol. 65(1), pages 220-233, January.
    • Handle: RePEc:eee:gamebe:v:65:y:2009:i:1:p:220-233
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    1. Hervés-Beloso, Carlos & Moreno-García, Emma, 2009. "Large economies and two-player games," Journal of Mathematical Economics, Elsevier, vol. 45(9-10), pages 603-608, September.
    2. Hervés-Estévez, Javier & Moreno-García, Emma, 2015. "A bargaining-Walras approach for finite economies," MPRA Paper 69802, University Library of Munich, Germany.
    3. Achille Basile & Maria Gabriella Graziano, 2012. "Core Equivalences for Equilibria Supported by Non-linear Prices," CSEF Working Papers 309, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    4. Hervés-Estévez, Javier & Moreno-García, Emma, 2014. "On bargaining sets for finite economies," MPRA Paper 62303, University Library of Munich, Germany, revised 18 Jul 2014.
    5. Luque, Jaime, 2011. "Heterogeneous Tiebout communities with private production and anonymous crowding," UC3M Working papers. Economics we1028, Universidad Carlos III de Madrid. Departamento de Economía.
    6. Maria Graziano & Maria Romaniello, 2012. "Linear cost share equilibria and the veto power of the grand coalition," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 38(2), pages 269-303, February.

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