Arbitrage and equilibrium in economies with externalities. (Q5959048)

The paper offers an extension of the general equilibrium market model. Namely, the consumption externalities together with closed, convex, and possibly unbounded consumption sets are admitted. Also the condition of no unbounded arbitrage, which is known in the literature, is extended. The main results show that the generalized condition of no unbounded arbitrage, mentioned above, is sufficient for the existence of an equilibrium in the considered market, and that it is necessary and sufficient for compactness of the set of rational allocations.