By Donald G. Saari (auth.), Prof. C. D. Aliprantis, Prof. O. Burkinshaw, Prof. N. J. Rothman (eds.)

ISBN-10: 3540152296

ISBN-13: 9783540152293

ISBN-10: 3642516025

ISBN-13: 9783642516023

**Read or Download Advances in Equilibrium Theory: Proceedings of the Conference on General Equilibrium Theory Held at Indiana University-Purdue University at Indianapolis, USA, February 10–12, 1984 PDF**

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**Additional resources for Advances in Equilibrium Theory: Proceedings of the Conference on General Equilibrium Theory Held at Indiana University-Purdue University at Indianapolis, USA, February 10–12, 1984**

**Sample text**

Now C(y,pv) = Min{pv· u : F(y,u) = u l}. We say that C(y,pv) is supportable if for every fixed C(y,pv) is supportable for all y. Pv' Suppose there is a finite number of households in the economy, where each household is defined by her utility function and her endowment of products and factors. We make the standard assumptions on tastes and endowrnents such that demand functions are weIl defined, continuous, and satisfy Walras' law. THEOREM 2. Pv) is supportable. then every efficient soaially optimal alloaation aan be supported.

U is conve:c and every weak utiUty optimum can PROOF. Let u, u' E U and 0 <; a <; 1. Take allocations x, x', wi th u(x) = u, u(x') = u'. , u"EU, and by the concavity of each Uj' u"=u(x") ;;. au+ (l-a)u' ;;. O. Hence, au + (1- alu' EU. Once it is known that U is convex, the second claim follows immediately from the Supporting Hyperplane Theorem •• The previous Proposition is illustrated in Figure ll(c). Note that, as u' in the figure, an optimum may not be supportable by a A» 0, even in the strictly monotone case.

Vol. 244 Advances in Equilibrium Theory Editcd by C. D. Alipr'Jntis. O. nd N. J. Rothman o Springer-Verlag Berlin Heidelberg 1985 cross-subsidization. Other economists have argued that the government can use commodity taxes and cross-subsidization to improve social welfare. The prices which emerge from this approach are the so-called Ramsey prices. , the public enterprise is a natural monopoly (see the illuminating discussion in Faulhaber [4]). , prices at which no other firm with the same technology can profitably enter the markets of the public enterprise.

### Advances in Equilibrium Theory: Proceedings of the Conference on General Equilibrium Theory Held at Indiana University-Purdue University at Indianapolis, USA, February 10–12, 1984 by Donald G. Saari (auth.), Prof. C. D. Aliprantis, Prof. O. Burkinshaw, Prof. N. J. Rothman (eds.)

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