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How to find the General Equilibria allowing for infinitesimal prices?

I know there can’t exist a usual Walrasian Equilibrium when both agents have the same lexicographic preferences: If both agents had the preferences $(x,y) \succeq (x’,y’) \iff:$ $x > x’ \text{ or } ...
Nicolas Torres's user avatar
4 votes
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Walrasian Equilibrium in A Simple Assignment (Matching) Model

I am reading Acemoglu 1996 and the Walrasian allocation in section II makes me confused. The setting is following. The economy lasts for two periods and consists of two types of agents, firms and ...
Alalalalaki's user avatar
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3 votes
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How to solve a general equilibrium problem with lexicographic preferences?

I have been unable to find a good example of this type of GE problem in our textbooks, and our professor has indicated that something like this may appear on our exam. So, here is a hypothetical ...
quickhatch's user avatar
2 votes
1 answer
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How can a "producer face a limited market as regards sales and yet a highly competitive market as regards price"?

Kaldor (1972): it is evident that the co-existence of increasing returns and competition—emphasised by Young and also by Marx, but wholly excluded by the axiomatic framework of Walrasian economics—is ...
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2 votes
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Becker Social Pricing and Lack of Smooth Demand

I was reading an article on Becker Social Pricing, where your demand for a good depends on other people's demand for the good. So basically this paper is meant to be a primer into explaining why some ...
Kitsune Cavalry's user avatar
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1 vote
1 answer
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How do I argue that "prices aggregate beliefs" in this Walrasian equilibrium?

Consider an $n$ person economy with only 1 good and 2 states of nature $r,s$. Consumer $i$'s utility function is $$u_i(x_{ir},x_{is})=\pi_i \ln x_{ir}+(1-\pi_i)\ln x_{is}$$ where $\pi_i\in (0,1)$ is ...
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How to find a Walrasian equilibrium for this economy?

Consider a production economy with 2 goods, 1 and 2, two consumers A and B, and 2 firms $\alpha,\beta$. The consumers' utility functions are \begin{align} u_A(x_1^A,x_2^A)=x_1^A+x_2^A-\frac{1}{24}(x_1^...
Ludwig Gershwin's user avatar
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Endowment of an agent

I was going through the Shapley-Folkman-Starr Lemma (https://simons.berkeley.edu/sites/default/files/docs/3605/simons2.pdf) and I came across the term "endowment" of an agent. My assumption ...
user12632521's user avatar
1 vote
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320 views

How to prove that the walrasian demand function $x(p,w)$ is continuous in $p$ and $w$?

If the utility function $u$ is continuous and satisfies local nonsatiation, and walrasian demand function $x(p, w)$ is a function (i.e. always map to only single values), how to prove that $x(p,w)$ is ...
Aqqqq's user avatar
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Walras's law in a Fisher market

Walras's law is stated for an exchange market: each agent comes to the market with a certain endowment of each commodity, a price-vector is determined, and the demand of each agent is the best bundle ...
Erel Segal-Halevi's user avatar
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MRS in Walrasian equilibrium price expression?

I have the utility function $U^A=\alpha ln(x^A)+\beta ln(y^A)$ for consumer $A$ and $U^B=\gamma ln(x^B)+\phi ln(y^B)$ for consumer $B$. They are endowed with $\omega^h_x$ and $\omega^h_y$ of $x$ and $...
GreenHumbollt's user avatar
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141 views

General Equilibrium allocation holding fixed a consumer's utility

I'm having some issues with solving this general equilibrium exercise. The way I started off is by assuming that since consumer 2's utility is fixed, he will have a fixed utility function. Then ...
Tommy's user avatar
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1 answer
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How do I find the Walrasian equilibrium price?

Consider a production economy with 1 consumer and 2 firms. The consumer's utility is $u(x,y)=xy$. The first firm makes $x$ using capital and labor according to the production function $x=k^\alpha l^{1-...
Ludwig Gershwin's user avatar
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How do I argue that the Walrasian equilibrium is unique?

Consider an economy with 1 consumer and 1 firm. There are only 2 goods, leisure $l$ and corn $c$ and the consumer is endowed with 24 hours of leisure. The consumer's utility function is $u(c,l)=cl$. ...
Ludwig Gershwin's user avatar
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Pure exchange economy: What if a consumer can set prices?

I'm trying to solve the following problem: Consider an exchange economy with 2 consumers and 2 goods. First, consumer A sets the price, then consumer B maximizes utility according to the price. Then ...
Ludwig Gershwin's user avatar
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Finding demand function in Walrasian equilibrium

Maybe the title doesn't reflect what I mean perfectly but basically, I wanna derive demand functions from those two utility functions: where $x_{11}$ is the consumption of good 1 by agent 1 and $x_{...
Tatanik501's user avatar
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For each Pareto efficient allocation, suggest how we might change the endowments so that the Pareto efficient allocation is a walrasian equilibrium

I have a two-person exchange economy Each agent has the following utility $u_i(x_i,y_i)=v(x_i)+y_i$ for agent $i=\{A,B\}$ Assume that $v$ is strictly concave and increasing function that has a ...
ThePooh's user avatar
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Edgeworth Economy and Walras equilibrium

I have been given an Edgeworth Economy with to consumers A and B. Their preferences are given with the utility functions: My question is, how do I find the walras equilibrium? I tried starting out ...
keybon's user avatar
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