What's the difference between competitive (or Walrasian) equilibrium and Pareto optimal equilibrium. Is a price equilibrium with transfer a competetive equilibrium?
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$\begingroup$ "Pareto-optimal" is its own definiton. An equilibrium allocation can be Pareto-optimal. $\endgroup$– GiskardFeb 16 at 12:59
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$\begingroup$ You might consider searching the already existing questions. $\endgroup$– GiskardFeb 16 at 13:01
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1$\begingroup$ Does this answer your question? Why is Pareto efficiency not always equitable or equilibrium? $\endgroup$– GiskardFeb 16 at 13:01
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2$\begingroup$ @Giskard. Thanks for your reply. Maybe, I got it. Pareto optimality is a property of a feasibile allocation, where we do not consider any individual endowment, or distributional issue. Whereas, a Walrasian equilibrium is a market based equilibrium with an initial endowment of commodities and shares of firms. Is that correct? Btw, you can also give a formal answer so that I can vote it $\endgroup$– DimitruFeb 16 at 14:31
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1$\begingroup$ Yes, that is why I 'upvoted' the comment. The phrasing is a little strange to me, but I think we mean the same thing. $\endgroup$– GiskardFeb 16 at 15:48
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