高级微观经济学 Part 4_General Equilibrium Theory II.pptVIP

Advanced Microeconomics General Equilibrium Theory Ⅱ (Market as a Process) Content The “core” Uniqueness of equilibrium Stability of equilibrium Welfare 1. The “core” Improve upon an allocation: a group of agents S is said to improve upon a given allocation x, if there is some allocation x’ such that: and If an allocation can be improved upon, then there is some group of agents can do better without market! Core of an economy: a feasible allocation x is in the core of the economy if it cannot be improved upon by any coalition. If x is in the core, x must be Pareto efficient. See the fig. Walrasian equilibrium is in core. Proof: let (x,p) be the Walrasian equilibrium with initial endowment wi. If not , there is some coalition S and some feasible allocation x’, such that all agents i in S strictly prefer to , and But Walrasian equilibrium implies Equal treatment in the core: if x is an allocation in the r-core of a given economy, then any two agents of the same type must receive the same bundle. Proof: if not. Let , So That is Every agent below the average will coalize to improve upon the allocation. Shrinking core: there is a unique market equilibrium x* from initial endowment w. if y is not the equilibrium, there is some replication r, such that y is not in the r-core. Proof: since y is not the equilibrium, there is another allocation g improve upon A (or B) at least. That means see the fig. Let (T and V are integers) Replicated V times of the economy, we have: So the coalition with V agents of type A and (V-T) of type B can improve upon y. Convexity and size: If agent has non-convex preference, is there still a equilibrium? See the fig. Replication the economy 2. Uniqueness of equilibrium Gross substitutes: two goods i and j are gross substitutes at price p, if : Proposition: If all