Competition versus cooperation in economics (Q1075935)
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English | Competition versus cooperation in economics |
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Competition versus cooperation in economics (English)
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1986
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This paper gives a simple presentation of some rather remarkable results in economic theory. The use of mathematical tools, in particular, of measure theory, has made a clear and very general statement of these results possible. The two types of allocation process in a very simple economy are discussed. One consists of proposing allocations of goods and seeing if any coalition of agents has a valid objection. This is the cooperating approach and allocations to which there is no objection are called core allocations. The other consists of introducing prices for goods, thus defining the income of individuals and of then requiring them to choose the best bundle of goods available to them. We then look for an equilibrium system of prices, one which balances the goods chosen with those available. This is the competitive approach. In an ideal economy one described by an atomless measure space of agents, where each individual has strictly no influence, the two approaches cooperative and competitive, give the same allocations. Furthermore very general asymptotic results can be proved showing that the two solutions are close in large enough economies.
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large economies
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core allocations
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equilibrium system of prices
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competitive approach
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atomless measure space
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asymptotic results
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