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Free disposal, monotonicity and equilibrium

Author

Listed:
  • Yang, Yi-You

Abstract

This paper studies the effect of free disposal on the existence of Walrasian equilibrium for exchange economies with indivisible objects. It is shown that allowing an agent to enjoy free disposal has the same effect for generating an equilibrium (or eliminating existing equilibria) as allowing every agent to enjoy free disposal. A new equilibrium existence theorem is given to show how this observation can enhance the existence results by Kelso and Crawford (1982) and Sun and Yang (2006).

Suggested Citation

  • Yang, Yi-You, 2012. "Free disposal, monotonicity and equilibrium," MPRA Paper 42585, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:42585
    as

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    References listed on IDEAS

    as
    1. Gul, Faruk & Stacchetti, Ennio, 1999. "Walrasian Equilibrium with Gross Substitutes," Journal of Economic Theory, Elsevier, vol. 87(1), pages 95-124, July.
    2. Ning Sun & Zaifu Yang, 2006. "Equilibria and Indivisibilities: Gross Substitutes and Complements," Econometrica, Econometric Society, vol. 74(5), pages 1385-1402, September.
    3. Ma, Jinpeng, 1998. "Competitive Equilibrium with Indivisibilities," Journal of Economic Theory, Elsevier, vol. 82(2), pages 458-468, October.
    4. Bikhchandani, Sushil & Mamer, John W., 1997. "Competitive Equilibrium in an Exchange Economy with Indivisibilities," Journal of Economic Theory, Elsevier, vol. 74(2), pages 385-413, June.
    5. 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.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Indivisibility; equilibrium; free disposal; monotonic cover;
    All these keywords.

    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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