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On the maximal domain theorem: A corrigendum to “Walrasian equilibrium with gross substitutes”

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  • Yang, Yi-You

Abstract

The maximal domain theorem by Gul and Stacchetti (1999) shows that for markets with indivisible objects, the set of gross substitutable preferences is a largest set for which the existence of a competitive equilibrium is guaranteed. In this paper, we give an example to show that a claim in their proof is false, and provide an alternative proof based on a new characterization of gross substitutability.

Suggested Citation

  • Yang, Yi-You, 2017. "On the maximal domain theorem: A corrigendum to “Walrasian equilibrium with gross substitutes”," Journal of Economic Theory, Elsevier, vol. 172(C), pages 505-511.
    • Handle: RePEc:eee:jetheo:v:172:y:2017:i:c:p:505-511
    DOI: 10.1016/j.jet.2017.09.003
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    References listed on IDEAS

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    1. John William Hatfield & Scott Duke Kominers & Alexandru Nichifor & Michael Ostrovsky & Alexander Westkamp, 2013. "Stability and Competitive Equilibrium in Trading Networks," Journal of Political Economy, University of Chicago Press, vol. 121(5), pages 966-1005.
    2. Gul, Faruk & Stacchetti, Ennio, 1999. "Walrasian Equilibrium with Gross Substitutes," Journal of Economic Theory, Elsevier, vol. 87(1), pages 95-124, July.
    3. Kelso, Alexander S, Jr & Crawford, Vincent P, 1982. "Job Matching, Coalition Formation, and Gross Substitutes," Econometrica, Econometric Society, vol. 50(6), pages 1483-1504, November.
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    Cited by:

    1. Elizabeth Baldwin & Omer Edhan & Ravi Jagadeesan & Paul Klemperer & Alexander Teytelboym, 2020. "The Equilibrium Existence Duality: Equilibrium with Indivisibilities & Income Effects," Papers 2006.16939, arXiv.org.
    2. Hatfield, John William & Kominers, Scott Duke & Nichifor, Alexandru & Ostrovsky, Michael & Westkamp, Alexander, 2019. "Full substitutability," Theoretical Economics, Econometric Society, vol. 14(4), November.

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    More about this item

    Keywords

    Maximal domain; Competitive equilibrium; Gross substitutability;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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