Equilibrium in a mixed economy of arrow-debreu type

The functioning of the current NIS economies is severely affected by regulatory interferencies with supply and demand for many commodities. In particular, the presence of dual markets is characteristic for these economies. On the first market, typically the “low-price sector” of the economy, prices are fixed and the allocation of goods is determined by rationing schemes and governmental orders. On the second market, flexible prices resulting from the market mechanism coordinate demand and supply. It is allowed that any surplus of good purchased on the first market can be sold on the second market at the then prevailing market prices.