TY - JOUR
T1 - Walrasian equilibrium with gross substitutes
AU - Gul, Faruk
AU - Stacchetti, Ennio
N1 - Funding Information:
* This research was supported in part by the National Science Foundation. Gul also thanks the Alfred P. Sloan Foundation for their support. We are grateful to Vincent Crawford who provided valuable comments and pointed out to us the connection between Kelso and Crawford [5] and our work, to John Geanakoplos for suggesting a weakening of our main assumption, and to Don Brown for valuable comments.
PY - 1999/7
Y1 - 1999/7
N2 - We study economies with indivisibilities that satisfy the gross substitutes (GS) condition. The simplest example of GS preferences are unit demand preferences. We prove that the set of GS preferences is the largest set containing unit demand preferences for which the existence of Walrasian equilibrium is guaranteed. We show that if a GS economy is replicated sufficiently many times, the equilibrium payment of any agent in the Vickrey-Clarke-Groves mechanism is equal to the value of the allocation he receives at the smallest Walrasian prices. The model extended to include production. Journal of Economic Literature Classification Numbers: D4, D44, D5, D51.
AB - We study economies with indivisibilities that satisfy the gross substitutes (GS) condition. The simplest example of GS preferences are unit demand preferences. We prove that the set of GS preferences is the largest set containing unit demand preferences for which the existence of Walrasian equilibrium is guaranteed. We show that if a GS economy is replicated sufficiently many times, the equilibrium payment of any agent in the Vickrey-Clarke-Groves mechanism is equal to the value of the allocation he receives at the smallest Walrasian prices. The model extended to include production. Journal of Economic Literature Classification Numbers: D4, D44, D5, D51.
UR - http://www.scopus.com/inward/record.url?scp=0347566058&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0347566058&partnerID=8YFLogxK
U2 - 10.1006/jeth.1999.2531
DO - 10.1006/jeth.1999.2531
M3 - Article
AN - SCOPUS:0347566058
SN - 0022-0531
VL - 87
SP - 95
EP - 124
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 1
ER -