Clarke's normal cone appears as the right tool to define the marginal pricing rule in finite dimensional commodity space since it allows to consider in the same framework convex, smooth as well as nonsmooth nonconvex production sets. Furthermore it has nice continuity and convexity properties. But it is not well adapted for economies with infinitely many commodities since it does satisfy minimal continuity properties. In this paper, we propose an alternative definition of the marginal pricing rule. It allows us to prove the second welfare theorem and the existence of marginal pricing equilibria for economies with several producers under assumptions similar to the one used for economies with a finite set of commodities. Our approach is sufficiently general to take into account the convex and the smooth cases for which our definition of the marginal pricing rule coincides with the one given by the Clarke's normal cone or the normal cone of convex analysis.
Positivity – Springer Journals
Published: Oct 12, 2004
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