Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Back to Fundamentals: Equilibrium in Abstract Economies †

Back to Fundamentals: Equilibrium in Abstract Economies † Abstract We propose a new abstract definition of equilibrium in the spirit of competitive equilibrium: a profile of alternatives and a public ordering (expressing prestige, price, or a social norm) such that each agent prefers his assigned alternative to all lower-ranked ones. The equilibrium operates in an abstract setting built upon a concept of convexity borrowed from convex geometry. We apply the concept to a variety of convex economies and relate it to Pareto optimality. The “magic” of linear equilibrium prices is put into perspective by establishing an analogy between linear functions in the standard convexity and “primitive orderings” in the abstract convexity. (JEL I11, I18, J44, K13 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review American Economic Association

Back to Fundamentals: Equilibrium in Abstract Economies †

American Economic Review , Volume 105 (8) – Aug 1, 2015

Loading next page...
 
/lp/american-economic-association/back-to-fundamentals-equilibrium-in-abstract-economies-jL0Ao9rWHe

References (15)

Publisher
American Economic Association
Copyright
Copyright © 2015 by the American Economic Association
Subject
Articles
ISSN
0002-8282
DOI
10.1257/aer.20140270
Publisher site
See Article on Publisher Site

Abstract

Abstract We propose a new abstract definition of equilibrium in the spirit of competitive equilibrium: a profile of alternatives and a public ordering (expressing prestige, price, or a social norm) such that each agent prefers his assigned alternative to all lower-ranked ones. The equilibrium operates in an abstract setting built upon a concept of convexity borrowed from convex geometry. We apply the concept to a variety of convex economies and relate it to Pareto optimality. The “magic” of linear equilibrium prices is put into perspective by establishing an analogy between linear functions in the standard convexity and “primitive orderings” in the abstract convexity. (JEL I11, I18, J44, K13 )

Journal

American Economic ReviewAmerican Economic Association

Published: Aug 1, 2015

There are no references for this article.