斯科特微观经济学课件Chapter21Theproblemofexchange.ppt

* The shrinking of the core Special deal – coalition Geoffreys - strictly better off Elizabeths - just as well off Block trade Large enough coalition Higher utility – some members Bigger economy Easier - large coalitions Pareto optima and the contract curve Agents A, B Utilities: uA(x1A,x2A); uB(x1B,x2B) The problem * Pareto optima and the contract curve Lagrangian First order conditions * Pareto optima and the contract curve Solution * Competitive equilibrium and Pareto optimality Agents – maximize utility Subject to budget constraints Total allocation = Total endowment * Competitive equilibrium and Pareto optimality Lagrangian The problems * Competitive equilibrium and Pareto optimality First order conditions Solution * * Appendix A Appendix B Appendix C Chapter 21 The Problem of Exchange * Harvesting Gathering: Need for Trade Primitive, two-person economy Geoffrey, Elizabeth Harvest gather fruit Apples, raspberries Individual property rights Voluntary trade – beneficial Options Consume all Trade some Edgeworth Box Feasible Trades Edgeworth box Graphical device Analyze: process of trade Size - total amount of goods Consumption Points – possible allocation * Edgeworth Box Feasible Trades Allocation Quantities - each good Consumed - each agent Feasible allocation Possible - goods available in economy No-trade allocation Feasible allocation No trade Consume – own harvest * Figure 21.1 The Edgeworth box: the benefits of trade * Each point in the box represents a different way of allocating the two goods in the economy to the two agents. Quantities of apples are measured on the vertical axis and quantities of raspberries on the horizontal axis. Geoffrey’s consumption levels are measured from point A and Elizabeth’s from point C. Raspberries to Geoffrey 0 2 3 8 Apples to Geoffrey 3 8 10 f D Apples to Elizabeth 2 7 Raspberries to Elizabeth 0 6 5 e C B A Finding Equilibrium Trades Equilibrium allocation Once reached No incentive