Walrasian equilibrium with gross substitutes (Q1306762): Difference between revisions

The problem of efficient production and allocation of indivisible objects among a set of consumers is considered. The economies are assumed to satisfy the gross substitutes (GS) condition introduced by \textit{A. S. Kelso jun.} and \textit{V. P. Crawford} [Econometrica 50, 1483-1504 (1982; Zbl 0503.90019)]. Also, the agents' preferences are quasilinear and depend on the bundle of objects and the amount of money the agents have. As assumed, the agents have a large endowment of money. The authors prove that the set of GS preferences is the largest set containing unit demand preferences for which there exists a Walrasian equilibrium. They also show that if a GS economy is replicated sufficiently many times, then 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.