New answers tagged pure-exchange-economy
2
votes
Finding Walrasian equilibria when Walrasian demands are not unique
let us first write the demand functions of individual $A$ and $B$
$$(x_A^d,y_A^d)(p_x,p_y,m_A)\in\left\{\begin{matrix}
(\frac{m_A}{p_x},0) & ,\frac{p_x}{p_y}<1\\
(0,\frac{m_A}{p_y}) & , \...
- 41
0
votes
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Finding Walrasian equilibria when Walrasian demands are not unique
An equilibrium is usually defined as the combination of a price(s) and quantity(/quantities/allocation).
Here $p_y = 1$, $x_A=0$, $y_A = 1$, $x_B=1$, $y_B=0$ is an equilibrium, $p_y = 1$ is an ...
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2
votes
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How to find the contract curve when both agents have linear utilities?
I rewrite the problem of maximization you wrote (I omit the endowments):
$\max x_A + y_A \;\;\qquad (1)$
subject to
$s x_B + y_B = \overline{U}\qquad (2)$.
This problem can be seen as a problem of ...
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