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Increasing returns, externalities and equilibrium in Riesz spaces

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This paper studies the appropriate pricing rule and its associated equilibrium concept when there are market imperfections in a Riesz space setting. We extend the notion of marginal pricing equilibria to situations with non convex production sets and external factors in an abstract vector lattice whose topological dual is a sublattice of its order dual. Our main result guarantees that a non-competitive equilibrium exists and it is related with first order condition for profit maximization at the time that it encompasses a wide range of economic situations since previous results in the literature become particular cases of it. Furthermore, we developed a new properness assumption that takes into account the non convexity of the production correspondences together with the presence of externalities which in some sense is a weakening of some known conditions in competitive economies

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  • Jean-Marc Bonnisseau & Matias Fuentes, 2022. "Increasing returns, externalities and equilibrium in Riesz spaces," Documents de travail du Centre d'Economie de la Sorbonne 22025, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:22025
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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Bonnisseau, Jean-Marc & Cornet, Bernard, 1988. "Valuation equilibrium and pareto optimum in non-convex economies," Journal of Mathematical Economics, Elsevier, vol. 17(2-3), pages 293-308, April.
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    5. Jones, Larry E, 1984. "A Competitive Model of Commodity Differentiation," Econometrica, Econometric Society, vol. 52(2), pages 507-530, March.
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    7. Fuentes, Matías N., 2011. "Existence of equilibria in economies with externalities and non-convexities in an infinite-dimensional commodity space," Journal of Mathematical Economics, Elsevier, vol. 47(6), pages 768-776.
    8. Jean-Marc Bonnisseau & Matías Fuentes, 2020. "Market Failures and Equilibria in Banach Lattices: New Tangent and Normal Cones," Journal of Optimization Theory and Applications, Springer, vol. 184(2), pages 338-367, February.
    9. Bonnisseau, Jean-Marc & Medecin, Jean-Philippe, 2001. "Existence of marginal pricing equilibria in economies with externalities and non-convexities," Journal of Mathematical Economics, Elsevier, vol. 36(4), pages 271-294, December.
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    More about this item

    Keywords

    Riesz space; marginal pricing rule; non-competitive equilibrium; sigma-locally tau-uniform properness;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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