Content area
Full Text
http://crossmark.crossref.org/dialog/?doi=10.1007/s00199-015-0875-x&domain=pdf
Web End = http://crossmark.crossref.org/dialog/?doi=10.1007/s00199-015-0875-x&domain=pdf
Web End = Econ Theory (2016) 61:497513
DOI 10.1007/s00199-015-0875-x
SYMPOSIUM
Received: 10 December 2014 / Accepted: 28 March 2015 / Published online: 28 April 2015 Springer-Verlag Berlin Heidelberg 2015
Abstract We generalize the classical equilibrium existence theorems by dispensing with the assumption of continuity of preferences. Our new existence results allow us to dispense with the interiority assumption on the initial endowments. Furthermore, we allow for non-ordered, interdependent and price-dependent preferences.
Keywords Continuous inclusion property Abstract economy Existence of
Walrasian equilibria
JEL Classication C62 D51
1 Introduction
The classical equilibrium existence theorems of Nash (1950), Debreu (1952), Arrow and Debreu (1954) and McKenzie (1954) were generalized to games/abstract economies where agents preferences need not be transitive or complete and therefore need not be representable by utility functions (see for example, Mas-Colell 1974; Shafer and Sonnenschein 1975; Gale and Mas-Colell 1975; Borglin and Keiding 1976; Shafer 1976; Yannelis and Prabhakar 1983; Wu and Shen 1996 among others). The
We are grateful to Conny Podczeck, Pavlo Prokopovych and a referee for comments and suggestions. We also thank Phil Reny for sharing his result in Reny (2013).
B Wei He
Nicholas C. Yannelis [email protected]
1 Department of Economics, Henry B. Tippie College of Business, The University of Iowa, 108 John
Pappajohn Business Building, Iowa City, IA 52242-1994, USA
http://crossmark.crossref.org/dialog/?doi=10.1007/s00199-015-0875-x&domain=pdf
Web End = http://crossmark.crossref.org/dialog/?doi=10.1007/s00199-015-0875-x&domain=pdf
Web End = http://crossmark.crossref.org/dialog/?doi=10.1007/s00199-015-0875-x&domain=pdf
Web End = http://crossmark.crossref.org/dialog/?doi=10.1007/s00199-015-0875-x&domain=pdf
Web End = http://crossmark.crossref.org/dialog/?doi=10.1007/s00199-015-0875-x&domain=pdf
Web End = http://crossmark.crossref.org/dialog/?doi=10.1007/s00199-015-0875-x&domain=pdf
Web End = http://crossmark.crossref.org/dialog/?doi=10.1007/s00199-015-0875-x&domain=pdf
Web End = Existence of Walrasian equilibria with discontinuous, non-ordered, interdependent and price-dependent preferences
Wei He1 Nicholas C. Yannelis1
123
498 W. He, N. C. Yannelis
need to drop the transitivity assumption from equilibrium theory was motivated by behavioral/experimental works which demonstrated that consumers do not necessarily behave in a transitive way.
A different line of literature pioneered by Dasgupta and Maskin (1986) and Reny (1999) necessitated the need to drop the continuity assumption on the payoff function of each agent. Their works were motivated by many realistic applications (for example, Bertrand competition and auctions), and generalizations of the NashDebreu equilibrium existence theorems were obtained where payoff functions need not be continuous. In other words, a new literature emerged on equilibrium existence theorems with discontinuous payoffs.1
The rst aim...