Existence of equilibria in the presence of increasing returns (Q1196128)
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English | Existence of equilibria in the presence of increasing returns |
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Existence of equilibria in the presence of increasing returns (English)
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23 November 1992
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The author proves that if the firms satisfy the survival assumption with the marginal pricing rule, then there exists a bounded loss pricing rule which satisfies the survival assumption and which is identical to the marginal pricing rule on the attainable production set. The consequences: (1) it explains why the bounded loss assumption is not necessarily in order to obtain a marginal pricing equilibrium; (2) using the main result, one deduces the existence of marginal pricing equilibria from the result for bounded loss pricing rules. Section two presents the model based on a number of assumptions related to the consumption sector, the technological possibilities of the producers and to the condition that the attainable production is set to be bounded even if one increases the initial endowments. The model is based on the Proposition 1, which synthesizes the results for marginal pricing equilibria and for general pricing equilibria. The final conclusion of this proposition could be stated as follows: there exists an equilibrium with the pricing rule derived from Proposition 1 which is actually a marginal pricing equilibrium. Section three proves this proposition based on Lemma 1, which has the proof given in the appendix. The paper is presented in a very intelligible way and the bibliographical references are substantial. The references inside the article are consistent.
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bounded loss pricing rule
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marginal pricing rule
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