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Endowments, patience types, and uniqueness in two-good HARA utility economies

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  • Andrea Loi
  • Stefano Matta

Abstract

This paper establishes a link between endowments, patience types, and the parameters of the HARA Bernoulli utility function that ensure equilibrium uniqueness in an economy with two goods and two impatience types with additive separable preferences. We provide sufficient conditions that guarantee uniqueness of equilibrium for any possible value of $\gamma$ in the HARA utility function $\frac{\gamma}{1-\gamma}\left(b+\frac{a}{\gamma}x\right)^{1-\gamma}$. The analysis contributes to the literature on uniqueness in pure exchange economies with two-goods and two agent types and extends the result in [4].

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  • Andrea Loi & Stefano Matta, 2023. "Endowments, patience types, and uniqueness in two-good HARA utility economies," Papers 2308.09347, arXiv.org.
    • Handle: RePEc:arx:papers:2308.09347
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    References listed on IDEAS

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    1. Geanakoplos, John & Walsh, Kieran James, 2018. "Uniqueness and stability of equilibrium in economies with two goods," Journal of Economic Theory, Elsevier, vol. 174(C), pages 261-272.
    2. Alexis Akira Toda & Kieran James Walsh, 2017. "Edgeworth box economies with multiple equilibria," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(1), pages 65-80, April.
    3. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    4. Hens, Thorsten & Loeffler, Andras, 1995. "Gross substitution in financial markets," Economics Letters, Elsevier, vol. 49(1), pages 39-43, July.
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