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Walrasian equilibrium as limit of a competitive equilibrium without divisible goods

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  • Michael Florig
  • Jorge Rivera Cayupi

Abstract

We study economies where all commodities are indivisible at the individual level, but per- fectly divisible at the aggregate level of the economy. Under the survival assumption, we show that any rationing equilibrium (Florig and Rivera [7]) in the discrete economy converges to a Walras equilibrium of the limit economy when the level of indivisibility becomes small. If the survival assumption is not satisfied, then rationing equilibrium converges to a hierarchic equilibrium (Florig [5]).

Suggested Citation

  • Michael Florig & Jorge Rivera Cayupi, 2015. "Walrasian equilibrium as limit of a competitive equilibrium without divisible goods," Working Papers wp404, University of Chile, Department of Economics.
    • Handle: RePEc:udc:wpaper:wp404
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    References listed on IDEAS

    as
    1. Kajii, Atsushi, 1996. "How to discard non-satiation and free-disposal with paper money," Journal of Mathematical Economics, Elsevier, vol. 25(1), pages 75-84.
    2. Florig, Michael, 2001. "Hierarchic competitive equilibria," Journal of Mathematical Economics, Elsevier, vol. 35(4), pages 515-546, July.
    3. Artstein, Zvi, 1979. "A note on fatou's lemma in several dimensions," Journal of Mathematical Economics, Elsevier, vol. 6(3), pages 277-282, December.
    4. Michael Florig & Jorge Rivera, 2015. "Existence of a competitive equilibrium when all goods are indivisible," Working Papers wp403, University of Chile, Department of Economics.
    5. Alexander Konovalov, 2005. "The core of an economy with satiation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 25(3), pages 711-719, April.
    6. Florig, Michael & Rivera, Jorge, 2010. "Core equivalence and welfare properties without divisible goods," Journal of Mathematical Economics, Elsevier, vol. 46(4), pages 467-474, July.
    7. Mertens, J. F., 2003. "The limit-price mechanism," Journal of Mathematical Economics, Elsevier, vol. 39(5-6), pages 433-528, July.
    8. Michael Florig, 2003. "Arbitrary small indivisibilities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(4), pages 831-843, November.
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    Cited by:

    1. Florig, Michael & Rivera, Jorge, 2017. "Existence of a competitive equilibrium when all goods are indivisible," Journal of Mathematical Economics, Elsevier, vol. 72(C), pages 145-153.

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