Accessibility of optima in pure exchange economies |
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Authors: | Stephen Schecter |
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Affiliation: | North Carolina State University, Raleigh, NC 27607, USA |
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Abstract: | Assuming differentiable monotonicity and differentiable convexity of utility functions, we show that if y and z are allocations of a pure exchange economy with z optimal and preferred to y by every agent, then there is a trade curve of finite length from y to z. We make no assumption on utility functions designed to ‘keep away from the boundary’. The conclusion need not hold if z is not optimal, unless a special boundary condition is assumed and (l, m) ≠ (2, 2). |
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