I have been trying to figure out conditions on the preferences of traders in an exchange economy such that the equilibrium prices are unique but I cannot be sure since all sources seem to be contradicting each other. On the Arrow-Debreu wikipedia page it says "In general, there may be many equilibria; however, with extra assumptions on consumer preferences, namely that their utility functions be strongly concave and twice continuously differentiable, a unique equilibrium exists." However, the Sonnenschein–Mantel–Debreu theorem does not tells us that the excess demand curve inherits the shape of the utility functions.

I do understand that for utilities satisfying the gross substitutes conditions the equilibrium prices are unique but are prices unique if we assume concave and twice differentiable utility functions?



Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Browse other questions tagged or ask your own question.