Equilibrium theory with unbounded consumption sets and non-ordered preferences : Part I. Non-satiation |
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Authors: | Dong Chul Won Nicholas C Yannelis |
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Institution: | 1. College of Business Administration, Ajou University, Woncheon-dong, Yeongtong-Gu, Suwon, Kyunggi 443-749, South Korea;2. Department of Economics, University of Illinois at Urbana Champaign, 330 Wohlers Hall 1206 S. Sixth Street, Champaign, IL 61820, United States |
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Abstract: | A new condition is introduced for the existence of equilibrium for an economy where preferences need not be transitive or complete and the consumption set of each agent need not be bounded from below. The new condition allows us to extend the literature in two ways. First, the result of the paper can cover the case where the utility set for individually rational allocations may not be compact. As illustrated in Page et al. Page Jr., F.H., Wooders, M.H., Monteiro, P.K., 2000. Inconsequential arbitrage. Journal of Mathematical Economics 34, 439–469], the no arbitrage conditions do not apply to an economy with a non-compact utility set. Second, we generalize the arbitrage-based equilibrium theory to the case of non-transitive preferences. |
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Keywords: | D51 D52 C62 G12 |
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