3 votes

Find the competitive equilibrium of the following economy

There will be no equilibrium. Both technology and endowment play no role in the argument. Assume there would be an equilibrium with price system $(p_1,p_2,p_3)$. Notice that all prices must be ...
Michael Greinecker's user avatar
2 votes
Accepted

How to find the Walrasian equilibrium for non monotonic utility functions?

Set of Pareto efficient allocations (or contract curve) is the set of all feasible allocations satisfying $1 \leq x_1=y_1\leq 3$. This is the line segment connecting points A and B in your graph. Also,...
Amit's user avatar
  • 8,366
2 votes

Exchange economy with two agents, what's the competitive equilibrium?

I’m going to change the notation to one I’m more comfortable with: Let the goods be $x,y$, the consumers $A,B$; and the respective endowments $(w_{x_A},w_{y_A}), (w_{x_B},w_{y_B})$. Let’s set as ...
Nicolas Torres's user avatar
1 vote

Finding the competitive equilibrium in an exchange economy with two perfect complements

Given a pure-exchange economy with $u_A(x_A,y_A)=\min(x_A,2y_A)$, $u_B(x_B,y_B)=\min(2x_B,y_B)$ Endowment of A is $(k_X,k_Y)$ and of B is $(12-k_X,12-k_Y)$ Set of feasible allocations is $\mathcal{F}...
Amit's user avatar
  • 8,366
1 vote

Competitive Equilibrium how to determine subject to functions

The endowment for individual 1 is $(4,0,1)$. The price for the asset is $q$ and assume individual 1 buys $\theta$ units of the asset at period 0. Then the total amount of money left in period 0 is: $$ ...
tdm's user avatar
  • 11.2k
1 vote

Exchange economy with two agents, what's the competitive equilibrium?

An allocation $((c^*_{a,1},c^*_{a,2}),(c^*_{b,1},c^*_{b,2}))$ is a competitive equilibrium allocation for the given economy supported by the price ratio $\frac{p_1^*}{p_2^*}$ if it satisfies the ...
mynameparv's user avatar
1 vote

Multiple Equilibria

Since you commented you only needed the agents’ demands as a function of the relative prices, I’m giving my answer. I take as numeraire $p_x = 1$. Agent $A$ The optimization program is $\max x + 100 ...
Nicolas Torres's user avatar
1 vote

Pure exchange economy: Set of multiple equilibria endowments

The following article: TODA, A.A. and WALSH, K.J., 2017. Edgeworth box economies with multiple equilibria. Economic Theory Bulletin, 5(1), pp. 65-80. though not focusing on the properties of the ...
Jovan Jezdic's user avatar

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