General Equilibrium price taking1(伦敦经济学院高级微观讲义).ppt

General Equilibrium: price taking Overview... Some puzzles in competitive equilibrium analysis Why price-taking? Building an Edgeworth box The situation from Alfs point of view Alfs offer curve The situation from his point of view ...as an Australian Bills offer curve Price-taking utility-maximising Alf Given competitive behaviour, the CE is the only consistent allocation So where do the prices come from? A fresh approach Why price-taking? View the population... ...is formed by any subgroup The idea of blocking: a little story if we can find a coalition... A formal approach Use the idea of blocking to introduce a basic solution concept In a 2-person world there are very few coalitions possible The 2-person core Why price-taking? The competitive equilibrium again Any competitive equilibrium must lie in the core A simple result The extremes of the 2-person core A basic relation... So lets clone the economy All the old coalitions are possible... No. {Alf-Arthur-Bill} can block A... How the blocking coalition works If N is bigger there may be more blocking coalitions The only allocation left in the 2N-person core (eventually)... A powerful result: the shrinking core A final reminder: Basic conceptsof the core Will these still be core allocations in the 4-person economy? B A Alf n Arthur Bill n Ben Alf n Arthur Bill n Ben D Alf, Arthur, Ben Bill G ...leaving the Ben twin outside the coalition This allocation is not a solution... But it shows that the core has become smaller Alf ?[xa+Ra] (G) Arthur ?[xa+Ra] (G) Bill xb (A) Ben Rb (D) 2Ra + Rb The coalition ? Feasible A B D Can this allocation be blocked? An A-person would be better off somewhere here Bingo! What if there were 500 of each type...? 500 of the A tribe 450 of the B tribe 500 of the A tribe 400 of the B tribe 500 of the A tribe 360 of the B tribe 500 of the A tribe 310 of the