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hal-00187219, version 1

Existence of marginal pricing equilibria in economies with externalities and non-convexities

Jean-Marc Bonnisseau () 1, Jean-Philippe Medecin () 1

Journal of Mathematical Economics 36, 4 (2001) 271-294

Abstract: We consider a general equilibrium model with externalities and non-convexities in production. The consumption sets, the preferences of the consumers and the production possibilities are represented by set-valued mappings to take into account possibility of external effects. There is no convexity assumption on the correspondences of production. We propose a definition of the marginal pricing rule, which generalizes the one used in the model without externality and, which satisfies a continuity assumption with respect to the external effect. We prove the existence of general equilibria under assumptions which allow us to encompass together the works on economies with externalities and convex conditional production sets, and those on marginal pricing equilibria in economies without externalities. We provide examples to illustrate the definition of the marginal pricing rule and to show the difference with the standard case.

  • 1:  CEntre de Recherche en Mathématiques, Statistique et Économie Mathématique (CERMSEM)
  • CNRS : UMR8095 – Université Paris I - Panthéon-Sorbonne
  • Domain : Mathematics/Optimization and Control
    Humanities and Social Sciences/Economies and finances
  • Keywords : General equilibrium – External effects – Non-convex set-valued mappings – Marginal pricing – Clarke's normal cone
 
  • hal-00187219, version 1
  • oai:hal.archives-ouvertes.fr:hal-00187219
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  • Submitted on: Wednesday, 14 November 2007 06:07:14
  • Updated on: Tuesday, 12 February 2008 16:28:34