Equilibrium with nonconvex technologies

Summary We provide an elementary proof of the existence of equilibrium in a general equilibrium model allowing for non-convex production sets. It is shown that when firms follow upper hemicontinuous and convex-valued pricing rules with bounded losses, a price vector and an allocation exist, such that all agents are in equilibrium and all markets clear.The existence result presented in this paper is a particular case of that one in Bonnisseau & Cornet (1988, Th. 2.1). In this respect our contribution consists of presenting an alternative proof which turns-out to be simpler and more intuitive.Thanks are due to Carmen Herrero and two anonymous referees for very helpful comments. Financial support from theDirection General de Investigación Cientiflca y Ténica, under project PS89–0066, is gratefully acknowledged.