The cone condition, properness, and extremely desirable commodities (Q1339010)

This paper links two conditions which have generated some interest in the literature and have an important role in proving the existence of an equilibrium, the second welfare theorem and the core equivalence theorem in infinite-dimensional commodity spaces: These are the cone condition introduced in Chichilnisky and Kalman (1980), and the properness condition in Mas-Colell (1986), which were studied also by Yannelis and Zame (1986), Chichilnisky and Heal (1984, 1992), and Rustichini and Yannelis (1991) among others. This paper establishes that these two conditions are one and the same. Indeed, the cone condition coincides also with the assumption of an extremely desirable commodity used in Yannelis and Zame (1986) and Rustichini and Yannelis (1991). The motivation for studying these conditions comes from the same economic application, showing the need to bring within the scope of equilibrium theory commodity spaces whose positive orthants have empty interior, a typical situation in infinite-dimensional linear spaces.